SINGAPORE (AP) — Oil prices dropped below $79 a barrel Friday in Asia amid a strengthening U.S. dollar and weak crude demand from developed countries.
Benchmark crude for February delivery was down 44 cents to $78.95 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, the contract fell 26 cents to settle at $79.39.
The euro fell to $1.4424 in early Asian trading Friday from $1.4500 on Thursday. Investors often buy commodities such as oil as a hedge against inflation when the dollar weakens and sell when it strengthens.
Crude prices also fell on concerns demand from the U.S. and Europe remains weak. Some analysts expect growth in demand from developing countries such as China will help make up for sluggish economic recoveries in rich nations.
“We continue to believe that strong demand from emerging markets will increasingly offset the lagging recovery” in developed world demand, Goldman Sachs said in a report.
Goldman said it expects crude to average $90 a barrel this year and $110 next year.
In other Nymex trading in February contracts, heating oil fell 1.24 cents to $2.07 a gallon and gasoline slid 0.92 cent to $2.06 a gallon. Natural gas futures skidded 1.4 cents to $5.57.
In London, Brent crude for February delivery fell 47 cents to $78.10 a barrel on the ICE Futures exchange.