NEW YORK (CNNMoney.com) -- Oil prices tumbled below $81 a barrel Tuesday as forecasts for warmer temperatures in the United States fostered expectations of weaker demand for heating fuel and the dollar firmed.
What prices are doing: Crude oil for February delivery fell $1.73, or 2%, to settle at $80.79 a barrel.
The retreat came after oil prices surged to 14-month highs last week as freezing temperatures in the United States and Europe boosted demand for heating fuels. But the rally faded Monday after forecasters predicted warmer weather for the weeks ahead.
What's moving prices: The bitter cold that recently gripped the entire eastern two-thirds of the nation will finally ease this week, according to AccuWeather.com.
Temperatures will rise above freezing for the first time this year in many Midwestern cities while milder air will reach the Northeast later this week, forecasters said. But the outlook for warmer temperatures may be short lived, with another cold snap expected in February.
Meanwhile, the dollar regained some ground against rival currencies. The greenback was up 0.1% against the euro to $1.449 and gained 1.2% versus the yen at ¥91.02. It fell 0.4% versus the pound to $1.617.
The government said the U.S. trade gap widened to $36.4 billion in November from a revised $33.2 billion in October. The shortfall was wider than the $34.5 billion gap economists at Briefing.com had forecast.
What analysts are saying: Oil prices may be kept in check this year as investors focus more on supply and demand issues instead of short-term trading strategies, according to a research report from Deutsche Bank.
"We expect that 2010 will mark the transition back to the traditional fundamentals relating to oil supply, demand and inventories in contrast to financial, currency and equity market drivers that we believe dominated oil price trends last year," Deutsche Bank analysts said. "In our view, this would mean that rallies in the oil price above $80 a barrel will only become sustainable in 2011." 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.80% | 3.80% | |
| 15 yr fixed | 3.09% | 3.11% | |
| 5/1 ARM | 2.65% | 2.69% | |
| 30 yr refi | 3.77% | 3.86% | |
| 15 yr refi | 3.09% | 3.21% |
Today's featured rates:
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 12,454.83 | -74.92 | -0.60% |
| Nasdaq | 2,837.53 | -1.85 | -0.07% |
| S&P 500 | 1,317.82 | -2.86 | -0.22% |
| Treasuries | 1.74 | -0.01 | -0.80% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 7.15 | 0.01 | 0.14% |
| Sprint Nextel Corp | 2.62 | 0.09 | 3.56% |
| Cisco Systems Inc | 16.33 | -0.06 | -0.37% |
| Chesapeake Energy Co... | 15.81 | 0.23 | 1.48% |
| Ford Motor Co | 10.60 | 0.01 | 0.09% |
|
The Senate hearing will focus JPMorgan's recent $2 billion trading loss, which Dimon announced earlier this month. More |
The offer for mail handlers is part of the Postal Service's plan to cut 150,000 jobs by 2015. More |
In the whirlwind of its IPO fallout, there has been a sort of glee in watching the company stumble. What's driving the Facebook-schadenfreude and what can the social network do about it? More |
One in six children in the United States is obese. These small businesses have found creative -- and lucrative -- ways to fight the childhood obesity epidemic. More |
In Harper County, Kansas, oil companies are offering farmers up to $1,250 an acre for the mineral rights that allow them to drill for oil on their property. More |
.
