BLBG:Crude Trades Near One-Week Low On Worsening European Crisis
Oil erased gains in New York to trade near its lowest in a week amid concern that Europe’s debt crisis is deepening and will cut demand for fuels.
West Texas Intermediate pared an earlier advance of as much as 0.9 percent. The euro fell for a fifth day against the yen, approaching an 11-year low, after Moody’s Investors Service cut its ratings outlook for Germany and the Netherlands yesterday amid speculation that Europe’s turmoil will engulf Spain and Italy. A U.S. government report tomorrow may show inventories fell for a fifth week, the longest stretch in a year.
“Europe continues to be no closer to a solution, but politicians seem content to keep applying short-term fixes rather than address the underlying problems,” said Guy Wolf, a strategist at Marex Spectron Group Ltd., a London-based commodities broker. “Crude markets are caught between a deteriorating demand picture and tightening supply fundamentals.”
Oil for September delivery was at $88.05 a barrel in electronic trading on the New York Mercantile Exchange at 11:36 a.m. London time. The contract dropped $3.69 to $88.14 yesterday, the lowest since July 13. Prices are down 11 percent this year.
Brent crude for September settlement slipped 5 cents to $103.24 a barrel on the London-based ICE Futures Europe exchange. The contract yesterday slipped 3.3 percent to $103.26. The European benchmark’s premium to West Texas Intermediate was at $15.13, compared with $15.12 yesterday.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
