BLBG:Crude Trades Near Four-Day Low Before Merkel, Sarkozy Meet to Revive Euro
Oil traded near its lowest level in four days, erasing earlier gains before German and French leaders meet in an attempt to revive growth in the euro region.
West Texas Intermediate futures in New York were down 0.3 percent before German Chancellor Angela Merkel and French President Nicolas Sarkozy try to tighten budget rules for European governments. Oil earlier rose as much as 0.6 percent after the U.S. Joint Chiefs of Staff chairman General Martin Dempsey said Iran is able block the strait of Hormuz for a period of time. Nigerian oil production was threatened by pipeline thefts and oil worker strike.
“All eyes will be on today’s meeting between German Chancellor Merkel and French President Sarkozy, aimed at forging plans to revive economic growth in euro-zone member states,” analysts at JBC Energy GmbH said in a note today.
Crude for February delivery fell as much as 66 cents to $102.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.26 at 10:30 a.m. London time. The contract fell as low as $100.08 on Jan. 6.
Brent oil for February settlement was at $113.18 a barrel, up 12 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York crude was at $11.90, the highest gap based on closing prices in almost two months.
Merkel and Sarkozy will meet in Berlin to flesh out a new rulebook for fiscal discipline negotiated at a Dec. 9 summit. Spain, Italy, the Netherlands, Austria and Germany plan to sell bonds this week, offering a gauge of market confidence. Spanish 10-year yields rose by the most in almost 17 years last week.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Sherry Su in London at lsu23@bloomberg.net
To contact the editors responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net; Stephen Voss at sev@bloomberg.net
