Oil prices fell back to close to $101 a barrel today after its record-shattering ascent last week.

The black goo is caught between fears of global economic downturn, which has softened prices, and the dollar’s continuing, which boosts oil’s attractiveness as a hedge against inflation. The dollar’s decline is also drawing in foreign investors, who can capitalize on the relative strength of other major currencies versus the dollar.

AP reports that “light, sweet crude for April delivery fell 74 cents to $101.10 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract fell 75 cents to settle at $101.84 a barrel on Friday, after spiking to a record $103.05 a barrel.”

“This is the first time in modern history that a major decoupling has occurred between the world’s largest economy and raw materials,” says Eric Roseman.

“Until a severe correction arrives for commodities — especially crude oil — stocks won’t make any progress. Stocks are going to head lower as oil and the rest of the complex continue to boom, inflation rallies and the dollar wobbles.”