By Kate Gibson and Virginia Harrison, MarketWatch
NEW YORK (MarketWatch) — Oil futures fell Monday as disharmony among European leaders curbed optimism on efforts to stem the region’s debt crisis, and as German data cast further doubt on the global economy.
During the weekend, German Chancellor Angela Merkel and French President Francois Hollande were reportedly at odds over tighter integration of Europe’s banking system. On Monday, think tank Ifo reported German business sentiment fell in September for a fifth month.
Crude for November delivery CLX2 -1.40% dropped $1.28, or 1.4%, to $91.61 a barrel on the New York Mercantile Exchange.
Crude fell 6.5% last week, its worst week since June. Contract expirations, speculation of a Strategic-Petroleum-Reserve release, comments from Saudi Arabian oil officials and rising inventories were among the factors contributing to the heavy weekly loss. Read more on what was behind oil’s slump last week.
A stronger dollar DXY +0.36% also added pressure, given the inverse relationship between the currency and oil and other commodities priced in the U.S. dollar, as they are now more costly to holders of other currencies. Read more about the dollar in Currencies.
Oil prices had surpassed $100 a barrel this month on thinking European moves to contain the continent’s debt crisis and monetary easing by global central banks would boost the world economy and demand for crude.
Prices have also been supported by U.S. and European Union sanctions on Iranian oil exports, which took hold in July. And, Iran would defend itself if attacked by Israel, Iranian President Mahmoud Ahmadinejad reportedly told CNN in an interview to be broadcast Monday.
The Iranian president is in New York, where is he scheduled to address the United Nations General Assembly on Wednesday.
Kate Gibson is a reporter for MarketWatch, based in New York.
Virginia Harrison is a MarketWatch reporter based in Sydney.
