By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude-oil futures lost ground in electronic trading Tuesday as part of a broader sell-off across commodity markets, as a ratings warning for Europe weighed on risk appetite.
Crude futures for January delivery CL2F -0.37% shed 59 cents, or 0.6%, to $100.39 a barrel on the New York Mercantile Exchange during Asian trading hours.
The European news flow turned negative on Tuesday, dampening sentiment across equity and commodity markets, after Standard & Poor’s placed the sovereign ratings of 15 euro-zone countries on watch for a possible downgrade. Read more about the S&P downgrade warning.
The move came as the dollar traded higher, adding further pressure to oil.
The dollar index DXY +0.27% , which measures the U.S. unit against a basket of six other major currencies, rose to 78.731, from 78.654 in North American trade late Monday.
A stronger greenback tends to discourage investment in dollar-denominated crude, as it makes the commodity more expensive to holders of other currencies.
Oil’s losses preceded the release of weekly U.S. supply reports from the American Petroleum Institute, due later Tuesday, followed by the more closely watched Energy Information Administration inventory report on Wednesday.
Analysts polled by Platts forecast a drawdown of 1.3 million barrels of U.S. commercial crude inventories for the week ending Dec. 2.
Virginia Harrison is a MarketWatch reporter based in Sydney.
