IV:Crude oil futures edge lower in cautious trade; Euro zone in focus
Investing.com - Crude oil futures were lower during European morning hours on Tuesday, as a broadly stronger U.S. dollar and concerns over the handling of the debt crisis in the euro zone continued to weigh on growth-linked assets.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD95.93 a barrel during European morning trade, down 0.5% on the day.
New York-traded oil prices fell by as much as 0.65% earlier in the day to hit a session low of USD95.81 a barrel.
Oil’s losses came as the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, hovered near a six-week high of 80.77.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Market players remained wary ahead of the upcoming Italian general elections next week, amid concerns that a hung parliament could hamper ongoing efforts at economic reforms.
Signs of slowing global economic activity and the impact on future oil demand prospects further dampened the appeal of the commodity.
The International Energy Agency’s chief economist Fatih Birol warned earlier that high oil prices are restraining the global economy.
Data last week showed that the euro zone's economy contracted by 0.6% in the three months to December, compared to expectations for a 0.4% decline.
Also last week, official data showed that Japan’s economy contracted by 0.1% in the fourth quarter, compared to expectations for an uptick of 0.1%.
Oil traders now looked ahead to the release of the minutes of the Federal Reserve’s January meeting on Wednesday for hints regarding the central bank’s attitude towards monetary policy.
Any policy pause signal from the Fed minutes may send the U.S. dollar higher, pressuring dollar-denominated commodities.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery dipped 0.1% to trade at USD117.27 a barrel, with spread between the Brent and crude contracts contracting to USD21.34 a barrel.
Brent prices remained supported after a report Monday showed that oil shipments from top exporter Saudi Arabia declined for the third consecutive month in December to 7.06 million barrels per day, the lowest level in 15 months.
Market players are looking ahead to talks between Iran and major world powers scheduled for February 26 for signs of progress regarding Tehran's disputed nuclear program.
