NEW YORK (AP) — Energy prices fell as the dollar rose after Federal Reserve Chairman Ben Bernanke mapped out a plan for pulling in government stimulus money when the economy recovers.
Bernanke said the Fed will probably start to tighten credit by raising interest rates, although that could be months away.
“On this word from Bernanke the dollar went up and brought crude prices down,” said PFGBest analyst Phil Flynn. “We live and die by (his) every word and syllable.”
Benchmark crude for March delivery fell 60 cents to $73.15 on the New York Mercantile Exchange. A stronger dollar makes crude more expensive for investors holding other currencies.
Energy prices were also knocked back by concern about European debt and bearish crude inventory numbers, Flynn said.
U.S. crude stocks jumped 7.2 million barrels last week, the American Petroleum Institute said late Tuesday, suggesting weak consumer demand for fuels like gasoline and heating oil. Analysts expected an increase of 2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The weekly petroleum inventory report from the Energy Department’s Energy Information Administration, scheduled for release Wednesday, was delayed until Friday as a big winter storm kept government offices closed.
Without the government numbers, “right now the American Petroleum Institute is gospel,” said Flynn. “(The delay) puts uncertainty in the market place and investors may wait until Friday to make a major decision on buying or selling.”
Retail gasoline prices fell 0.003 cents overnight to a national average of $2.641 per gallon, according to AAA, Wright Express and Oil Price Information Service. Prices are 10.6 cents lower than a month ago, but still 71.3 cents higher than year-ago levels.
“The trend overall for gasoline demand is definitely still very weak,” said Flynn. In part, the fresh blanket of snow is keeping drivers off the road, but deeper economic problems will keep their cars parked even after the snowy weather passes.
In other Nymex trading in March contracts, heating oil fell 1.67 cents to $1.9212 a gallon, and gasoline was down 2.64 cents at $1.9026 a gallon. Natural gas slid 1.6 cents to $5.274 per 1,000 cubic feet.
In London, Brent crude dropped 68 cents to $71.45 on the ICE futures exchange.
Associated Press writer Chun Han Wong in Singapore and Pablo Gorondi in Budapest, Hungary contributed to this report.