Oil drops below $44 first time in two months as dollar rallies

By Mark Shenk

Oil fell to the lowest level in more than two months in New York as the surging dollar countered projections that U.S. crude supplies declined a ninth week.

Futures tumbled as much as 2.2 percent as the Bloomberg Dollar Spot Index climbed to a seven-week high. Commodities fell a fourth day as the stronger greenback reduced the appeal of raw materials denominated in the U.S. currency as an investment. Nationwide supplies probably fell by 2 million barrels, according to a Bloomberg survey before an Energy Information administration report Wednesday.

West Texas Intermediate for August delivery, which expires Wednesday, sank 79 cents, or 1.8 percent, to $43.86 a barrel on the New York Mercantile Exchange at 9:14 a.m. New York time. Brent for September settlement slipped 55 cents to $46.11 on ICE Futures Europe.