LONDON—Crude-oil prices were mixed as investors remained cautious ahead of a conference call between Greek Prime Minister George Papandreou, German Chancellor Angela Merkel and French President Nicolas Sarkozy to discuss the Greek debt crisis.
U.S. crude oil retreated from a six-week high, while Brent made slight gains, tracking the euro against the dollar. Ahead of the New York day, the October contract on the New York Mercantile Exchange was down 59 cents, or 0.7%, at $89.62 a barrel. The October Brent contract on London's ICE futures exchange was up 32 cents, or 0.3%, at $112.21 a barrel.
Adding to the gloom, Moody's Investors Service cut the credit ratings of two French banks, Société Générale and Crédit Agricole, because of their exposure to Greek debt, causing fresh concern that the European debt crisis could spread to other countries in the euro zone.
The euro is likely to remain under pressure against the dollar throughout the day, which points to further losses in the oil market, said Myrto Sokou, an analyst at Sucden Financial.
Filip Petersson, a commodity strategist at SEB, said the strength of the dollar against the euro, combined with the bearish demand picture painted Tuesday by the International Energy Agency on Tuesday, will pull down oil prices.
A strong dollar makes purchasing oil more expensive for holders of currencies other than the greenback.
A survey late Tuesday from the American Petroleum Institute, an industry group, did little to comfort investors, after it showed that crude oil inventories last week fell more than expected, by 5.1 million barrels. API said Tropical Storm Lee, which disrupted output in the oil-rich Gulf of Mexico, caused the tightening of crude stockpiles.
Traders will look to the weekly official government figures on stockpiles from the U.S. Department of Energy, due for release later in the day for cues on market direction. But even if these figures confirm tightened supply, weaker demand from the U.S. and China should prevent prices from rising on the news, Mr. Sokou said.
