KUALA LUMPUR, Malaysia (AP) — Oil extended its losing streak Monday, slipping below $78 a barrel in Asia amid declines in stock markets and a stronger U.S. dollar.
Benchmark crude for February delivery fell was down 52 cents to $77.48 a barrel at midday Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. On Friday, the contract slid $1.39 to settle at $78. The price was down $4.75 for the week after declining for five straight days.
Major stock markets in Asia such as Japan and Hong Kong were down early Monday following Friday’s decline on Wall Street where rising loan losses at JPMorgan Chase & Co. sparked concerns about profits at other big banks. Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and Wells Fargo & Co. are expected to post results this week.
“We see a downward pressure on oil. The corporate earnings results so far have not really indicated much revenue growth and that points to continued weakness in the US economy,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
In addition, the dollar was stronger, making it more expensive for holders of foreign currencies to purchase oil, which is priced in U.S. dollars. The euro fell to $1.4366 in Asian trading Monday from $1.4340 on Friday.
Shum said the recent cold weather in the U.S. has failed to sharply reduce oil inventories and the frigid spell is now easing, which will detract from demand for oil.
Oil prices may slide further but Shum said bargain hunting is likely to support prices at the mid $70s level. If the bank earnings are strong, the mood could also turn around quickly, he said.
In other Nymex trading in February contracts, heating oil fell 1.01 cent to $2.0359 a gallon and gasoline slid 0.58 cent to $2.0396 a gallon. Natural gas futures shed 6.2 cents to $5.629.
In London, Brent crude for March delivery fell 40 cents to $76.71 a barrel on the ICE Futures exchange.