BLBG:Oil Declines as European Debt Counters Bets on Sanctions Again Iran
Oil dropped from the highest price in almost eight months in New York as concern that Europe’s debt crisis is worsening countered bets that sanctions on Iran will curb crude supplies.
Futures slipped as much as 0.4 percent after Greek Prime Minister Lucas Papademos said deeper cuts in incomes are the only way for the country to remain in the euro area and receive more financing from international creditors. Prices rose earlier today after French Foreign Minister Alain Juppe said he hopes Europe will decide at a Jan. 30 meeting to embargo Iranian oil.
“What we’re seeing is a fundamental tug-of-war, if you like, between two competing forces,” Ric Deverell, head of commodities research for Credit Suisse Group AG said in a Bloomberg Television interview, referring to Iran and Europe’s sovereign debt crisis. “We have the oil market in a volatile range at the moment that’s likely to persist for some time.”
Crude for February delivery slid as much as 42 cents to $102.80 in electronic trading on the New York Mercantile Exchange. It was at $102.95 at 3:15 p.m. Sydney time. The contract yesterday climbed 0.3 percent to $103.22, the highest close since May. 10. Prices rose 8.2 percent in 2011, the third annual increase.
Brent oil for February settlement declined 53 cents, or 0.5 percent, to $113.17 on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $10.18. The gap has widened from $7.93 on Dec. 27 as the tension over Iran has increased. It rose to a record $27.88 on Oct. 14.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
