Energy Update: Equity sell-off drives down oil

Equity sell-off drives down oil

NEW YORK — A global sell-off on equity markets dragged down crude prices by nearly 3 percent Thursday, the first decline this week.

The price for a barrel of crude dropped by more than $1 immediately when U.S. markets opened, with the Dow Jones industrials giving up 130 points. Markets in Asia and Europe fell early in the day. Crude prices have risen steadily this year as the dollar lost value against the euro. Oil is bought and sold largely in dollars, so someone with euros can essentially buy more crude for less.

Since the beginning of February, the dollar has lost more than 16 percent of its value against the euro. When the U.S. dollar climbs, crude prices tend to fall.

Benchmark crude for December delivery gave up $2.12 to settle at $77.46 a barrel with one day remaining until the futures contract expires on the New York Mercantile Exchange. Most trading already moved to the January contract, which lost $2.05 to settle at $78.05. But with oil near $80 a barrel, consumers are starting to feel the pinch.

Leaders with the International Energy Agency in Paris, the U.S. Department of Energy, and even the Organization of Petroleum Exporting Countries have warned that rapidly rising energy prices could slow any economic rebound.

ASSOCIATED PRESS