Oil dips on gloomy consumer sentiment

By Chavon Sutton, staff reporter


NEW YORK (CNNMoney.com) -- Oil prices fell Friday, as a preliminary consumer sentiment report came in worse than expected, overshadowing a rosy government retail sales report and a weaker dollar.

What prices are doing: Crude for April delivery dropped 87 cents to $81.24 a barrel after climbing above $83 earlier in the day.

oil.gif.mkw.gif
For more commodities prices click the chart

What's moving the market: Positive retail sales and a weaker dollar weren't enough to keep oil prices above the $83 threshold for long.

The Commerce Department on Friday said that total retail sales edged up 0.3% in February, renewing optimism about the economy. Oil prices jumped to an intraday high of $83.16 a barrel.

The dollar index (DXY), which measures the greenback against a basket of other currencies, was down 0.64% to 79.81, also helped support oil. Because oil is priced in dollars, a weaker dollar makes it cheaper for foreigners to buy the commodity.

But a less than cheery preliminary reading of the University of Michigan Consumer Sentiment Index helped send oil prices down by as much as $1.54. The index slipped to 72.5 in March, from 73.6 in February, well below analyst estimates of 74.0, according to a survey by Briefing.com.

What analysts are saying: "Consumer sentiment sucked the life out of the market today," said Gianna Bern, president of Brookshire Advisory and Research, Inc., a Chicago-based investment research firm.

"Crude has gotten ahead of itself in the last couple weeks," said Bern. "An $81 a barrel [price] is very generous considering global demand is still fairly low." She added that crude inventories are still above their 5-year averages.

Still, higher demand forecasts this week from the U.S. Energy Information Administration and the International Energy Agency in Paris, as well as a better than expected jobless report, point toward improving economic conditions.

Analysts say the oil rally should continue, barring any surprising economic news with prices piercing a ceiling of about $85 a barrel as early as May.

Looking ahead, traders are keeping an eye on OPEC's semi-annual conference on March 17, where analysts expect oil quotas to remain unchanged. April crude contracts expire on March 22.

Gasoline prices: The national average for a gallon of regular unleaded gasoline rose to $2.783 on Friday, up from the previous day's price of $2.776, according to motorist group AAA.  To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.38%4.39%
15 yr fixed3.81%3.82%
5/1 ARM4.06%4.08%
30 yr refi4.39%4.39%
15 yr refi3.80%3.81%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 25,075.86 11.50 0.05%
Nasdaq 7,817.26 11.54 0.15%
S&P 500 2,803.55 5.12 0.18%
Treasuries 2.86 -0.00 -0.07%
Data as of 11:31am ET
Company Price Change % Change
Bank of America Corp... 30.10 0.31 1.06%
Netflix Inc 368.34 -32.14 -8.03%
Advanced Micro Devic... 16.60 0.02 0.12%
General Electric Co 13.72 -0.19 -1.33%
AT&T Inc 31.86 -0.04 -0.14%
Data as of 11:16am ET

Sections

John Schnatter is Papa John. He's tied to Papa John's advertising as cheese is to pizza, but he resigned as chairman for using a racial slur. More

Walmart will boost its use of Microsoft's cloud services and work with the tech firm on artificial intelligence and machine learning projects. The common enemy is Amazon. More