Crude oil futures settled in negative territory Thursday as comments from the European Central Bank's president cast cold water on the prospect of a rescue package for Greece, sending the dollar sharply upward and putting a corresponding weight on dollar-denominated oil prices.

Throughout the day, oil futures moved along with the currency markets, which in turn hung on news about the Greek financial situation. That issue was the chief subject of discussion at a European Union summit in Brussels that began Thursday.

Late in the U.S. trading session, remarks by European Central Bank President Jean-Claude Trichet, who said an International Monetary Fund bailout for Greece isn't necessary and that austerity measures would be used instead, sent the dollar upward, which pushed crude oil prices to a negative close. Light, sweet crude for May delivery settled down 8 cents at $80.53 a barrel on the New York Mercantile Exchange, while Brent crude on the ICE futures exchange settled down 1 cent at $79.61 a barrel.

Having the opposite effect had been an earlier statement by Trichet that the bank would extend an emergency collateral program that made it easier to trade Greek debt into next year, and that talk had boosted the euro against the dollar overnight and helped the front-month crude contract rise as much as 1% during the day.

"Certainly worries about Greece are overhanging the market," said Andy Lebow, a broker at MF Global in New York. "Traders are hoping that the stabilization of the situation will give them some certainty as to whether the euro is going to come under further assault," he said. "Even though we aren't expecting great growth in petroleum demand out of Europe, should the turmoil persist, that may threaten demand."

Even before Trichet's later comments sent oil down late in the trading session, oil prices chopped up and down during the day, as the support from a weaker dollar was counterbalanced by Wednesday's report of a large increase in oil inventory levels, sending a strong signal that underlying demand for petroleum remains weak.

The U.S. Energy Information Administration reported a 7.25 million-barrel increase in crude inventories last week, substantially more than the 1.4 million gain expected by analysts, and the largest gain in several months.

"Even after yesterday's bearish inventory data, the market didn't really do a whole lot on the downside and managed to fight its way back yesterday, so we saw some follow-through from that early today," said Tom Bentz, a broker and analyst at BNP Paribas Commodity Futures Inc. "Certainly the jobs data was supportive and the equity market is up, so that's supportive as well, but it's hard to make a lot out of it; we're still in the same old range. Once again the market is having trouble holding gains when it gets into the upper end of the range near $81 a barrel."

Weakness in the natural gas market also played a supporting role in weaker crude prices Thursday, Bentz said. Natural gas prices settled down 3% at $3.981 per million British thermal units on mild weather forecasts and a build in gas inventories. "Maybe the nat gas weakness helped drag a little on crude," Bentz said. "There are some periods where, when we have nothing else to trade on, the oil market may look at nat gas."

Front-month April reformulated gasoline blendstock, or RBOB, settled down 35 points, or 0.2%, at $2.2177 a gallon. April heating oil settled down 14 points, or 0.1%, lower at $2.0693 a gallon.


More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:


Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close

-By Edward Welsch, Dow Jones Newswires; 613-237-0669; edward.welsch@dowjones.com