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By Bloomberg

Oil touched its lowest level since 2009 amid increased projections for U.S. output, while the dollar slipped and Treasuries rallied before this week’s Federal Reserve meeting. European equity-index futures rose and Chinese shares climbed as the government vowed to support expansion.

West Texas Intermediate crude dropped 1.4 percent to $44.23 a barrel by 7:15 a.m. in London, after earlier falling to as low as $43.57. The Bloomberg Dollar Spot Index declined 0.2 percent as the euro climbed from a 12-year low and the yield on 10-year U.S. notes fell three basis points. Futures on the Euro Stoxx 50 index added 0.4 percent and Standard & Poor’s 500 Index contracts rose 0.2 percent. The Shanghai Composite Index advanced 2.3 percent.

U.S. oil dropped 9.6 percent last week and speculators cut bullish wagers to the lowest in more than two years as falling rig counts fail to cool a supply glut. The Fed may remove the word “patient” from its statement this week, giving it more flexibility on the timing of interest-rate increases as U.S. monetary policy diverges from efforts by European and Asia- Pacific policy makers to shore up growth.

“Strengthening of the dollar means weaker commodities and oil is sliding again after seeing some recent gains,” Heo Pil Seok, chief executive officer at Midas International Asset Management, which oversees $9.4 billion of assets, said by phone from Seoul. “The U.S. economy is looking positive and many investors believe that means interest rates may rise earlier than expected, strengthening the dollar.”

Brent Slide

West Texas Intermediate crude lost 4.7 percent on Friday, and capped a fourth straight weekly retreat. Brent, the benchmark contract for more than half of global oil, fell 0.9 percent to $54.18 per barrel following Friday’s 4.2 percent retreat. The Bloomberg Commodity Index was little changed today after sliding 3.2 percent last week, the biggest slide since November.

The U.S. surplus may soon strain the country’s storage capacity, renewing the slump in oil prices, the International Energy Agency said Friday. U.S. production will expand this year by about 750,000 barrels a day to 12.56 million a day, the IEA said.

Hedge funds and other money managers reduced their net-long position in WTI by 2.5 percent in the seven days ended March 10, U.S. Commodity Futures Trading Commission data show.

A gauge of energy producers dropped the most among the 10 industries on the MSCI Asia Pacific Index. South Korea’s S-Oil Corp. tumbled 4.4 percent and Japan’s Inpex Corp. retreated 4.3 percent. Santos Ltd., Australia’s No. 3 producer, fell 2 percent while BHP Billiton Ltd., the world’s biggest miner, decreased 1.2 percent for a 10th straight drop, the longest losing streak since 1998.

Dollar, Won

Anger over alleged bribes and kickbacks at Brazil’s state- run oil producer Petroleo Brasileiro SA brought more than 1 million people to the streets Sunday demanding President Dilma Rousseff’s impeachment. The Next Funds Ibovespa Linked Exchange Traded Fund, which tracks Brazilian shares, dropped 2.4 percent in Tokyo.

U.S. 10-year notes paid 2.08 percent while 30-year Treasury yields fell three basis points to 2.67 percent. German bunds due in a decade paid 0.25 percent and similar French securities offered 0.49 percent. The extra yield investors get from Treasuries over bonds in Europe is helping drive demand for U.S. government securities, said Kazuaki Oh’e, a debt salesman at CIBC World Markets Japan Inc. in Tokyo.

AAA Bonds

Singapore’s bonds became the world’s highest-yielding AAA ranked government debt securities today, surpassing Australia’s. Ten-year notes in the island-state yielded 2.481 percent as of 2:43 p.m. local time, versus 2.479 percent in Australia. The difference was about four basis points earlier in Asian trading. The inversion is the first since 1998, according to data compiled by Bloomberg.

The Bloomberg dollar gauge, which tracks the greenback against 10 major peers, climbed 0.8 percent on Friday to its highest level in data going back to the end of 2004.

The euro is heading for its biggest ever quarterly loss versus the dollar after the region’s central bank took deposit rates below zero and began buying bonds as it tries to stave off deflation. The dollar touched $1.0458 to the euro today, the strongest versus the joint currency since January 2003, before weakening to $1.0505.

Aussie Bears

The won slipped a sixth day, losing 0.3 percent to 1,131.68 per dollar and touching its weakest level since July 2013. Korea’s currency retreated 2.7 percent last week, the most since 2011, as the central bank unexpectedly cut interest rates. Malaysia’s ringgit dropped 0.5 percent to 3.7015 a dollar.

The Australian dollar was 0.1 percent higher at 76.46 U.S. cents, after sliding 0.9 percent on Friday. Minutes of the Reserve Bank of Australia’s March 3 meeting, when the key rate was held at 2.25 percent after a cut in February, are due Tuesday.

Investors raised their bearish bets on the Australian dollar to a record as BlackRock Inc., the world’s largest money manager, expects the currency to plunge to levels well below what the RBA prefers. Traders wager there’s a 50 percent change the RBA will reduce borrowing costs again within six months, according to data compiled by Bloomberg from swap contracts.

Policy makers will take action if China’s growth, which the government targeted at about 7 percent this year, drifts toward the lower limit of its range and cuts into employment or wages, Premier Li told reporters. While stripping the government of some of its role in the world’s second-largest economy may face resistance from vested interests, it is crucial, he said.

The Shanghai Composite, the world’s best-performing benchmark stock gauge last year, is up 6.6 percent this year and capped a fourth straight advance. The number of new mainland stock accounts surged in the two weeks through March 6. A gauge of mainland companies listed in Hong Kong advanced 0.7 percent and the Hang Seng Index increased 0.4 percent.