Oil falls to below $87 amid stronger US dollar

[September 19, 2011]  SINGAPORE (AP) -- Oil prices fell to below $87 a barrel Monday in Asia as investor concerns about Europe's debt crisis fueled a stronger U.S. dollar.

Benchmark oil for October delivery was down $1.12 at $86.84 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude dropped $1.44 to settle at $87.96 on Friday.

In London, Brent crude for November delivery was down 22 cents at $112.00 on the ICE Futures exchange.

The euro has weakened this month amid growing fears that a possible debt default in Greece could trigger similar moves in Portugal, Ireland, Italy and Spain as well as a banking crisis. A stronger dollar makes commodities such as oil more expensive for investors with other currencies.

The euro fell to $1.3698 on Monday from $1.3794 on late Friday.

"We still view euro zone debt issues as challenging to the extent that a long term solution will remain elusive," energy consultant Ritterbusch and Associates said in a report. "The euro will be proceeding through a renewed weakening phase that will be placing additional pressures on the oil market."

Investors this week will also be closely watching the outcome of a U.S. Federal Reserve meeting and corporate quarterly earnings results.

In other Nymex trading for November contracts, heating oil fell 1.0 cent to $3.01 per gallon and gasoline futures slid 1.3 cents to $2.75 per gallon. Natural gas for October delivery fell 0.7 cent to $3.80 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.