Oil falls to $74 on risk-averse mood, U.S. Gulf output | Reuters
Oil dropped more than $1 a barrel to around $74 on Monday as rising risk aversion weighed on stock markets and boosted the U.S. dollar, while more U.S. Gulf oil output came back online in the wake of two hurricanes.
The U.S. dollar, seen as a safe haven, rose as worries about Chinese property developer Evergrande's solvency spooked equity markets and as investors braced for the Federal Reserve to take another step towards tapering this week.
"Far East stock markets and the strong dollar are affecting oil," said Tamas Varga of oil broker PVM. "Nonetheless, unless all hell breaks loose, the positive sentiment ought to prevail."
Brent crude fell $1.27, or 1.7%, to $74.07 at 0941 GMT, having dropped as low as $73.75 earlier in the session. U.S. West Texas Intermediate (WTI) declined $1.33, or 1.9%, to $70.64.
A stronger dollar makes U.S. dollar-priced oil more expensive for holders of other currencies and generally reflects higher risk aversion, which tends to weigh on oil prices.
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