NEW YORK (CNNMoney.com) -- Oil dipped to near $71 a barrel on Thursday as the dollar climbed to a three-month high against the euro.
"We had a strong dollar, and that was all about the fact that the Federal Reserve sent a very slight signal that we're seeing the light at the end of the tunnel when it comes to the economic stimulus," said Phil Flynn, a senior market analyst at PFG Best. "A strong dollar puts pressure on commodities."
Crude oil for January delivery fell 1 cent to settle at $72.65 a barrel after diving as low as $71.37 earlier. Prices climbed nearly 3% on Wednesday following an inventory report that showed an unexpected drop in oil supplies.
On Wednesday, the Fed said it would hold interest rates steady near 0%. In a statement accompanying the decision, Fed policymakers said they see market conditions improving. That helped push the dollar to its highest point since September.
The euro fell 1.3% to $1.435 against the greenback on Thursday after Standard & Poor's downgraded Greece's credit rating. This followed a downgrade by Fitch just over a week ago, when health care companies complained that the country was behind on public health care-system payments.
"People were buying the dollar because of both good news and bad news today," Flynn said. Some investors saw the Fed's statement as a positive signal for the economy, and others bought the dollar as a safe haven because they were worried about another credit crisis overseas.
Gasoline prices. The national average price for a gallon of regular unleaded gas fell to $2.590, down four tenths of a cent from the previous day's price of $2.594, according to motorist group AAA. This is the ninth consecutive day prices have declined.
|Overnight Avg Rate||Latest||Change||Last Week|
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