By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude-oil futures extended losses in electronic trading Thursday, as Europe’s debt mess kept investors cautious, despite some encouraging assurances from leaders in the region.
Crude oil for October delivery CL1V -0.38% dropped 29 cents, or 0.3%, to $88.61 a barrel on the New York Mercantile Exchange during Asian trading hours.
The losses add to a 1.4% fall for crude in the North American session. Read more about Wednesday’s oil moves.
“Investors are staying on the sidelines. There are growing uncertainties about what’s going to happen in Europe,” said Chung Yang, oil analyst from Phillip Futures in Singapore. “Investors need more certainty in the macro-economic [environment].”
Chung forecasts oil will continue to trade between $85 a barrel and $90 a barrel in the near term.
Reassurances by France and Germany that they would continue to stand behind Greece buoyed Asia equity markets on Wednesday. Sentiment was also encouraged by Greece’s reported conviction that it would meet the obligations under its debt agreements, diluting the likelihood of a disorderly default.
But the euro-zone debt situation remains highly uncertain, with the focus now turning to a meeting of European Union finance leaders to be held on the weekend, which will also be attended by U.S. Treasury Secretary Timothy Geithner.
Crude was also pressured by a stronger dollar in Asia trading Thursday.
The dollar index DXY +0.01% , which tracks the greenback against a basket of six other currencies, rose to 76.941, from 76.825 in late North American trade on Wednesday. Read more about currencies.
A higher dollar tends to discourage investment in dollar-denominated crude oil, as it makes the commodity more expensive to holders in of other currencies.
Virginia Harrison is a MarketWatch reporter based in Sydney.
