Oil declined for a second day before a meeting of European Union leaders to discuss the region’s debt crisis, which has slowed the economy and threatened to curb fuel consumption. Futures slipped as much as 0.8 percent today in New York after advancing 1.1 percent last week. EU chiefs will gather at about 2 p.m. in Brussels to complete a German-led deficit- control treaty and endorse a 500 billion-euro ($660 billion) rescue fund. Greece and its private creditors said Jan. 28 they expect to complete a deal in the coming days. International Atomic Energy Agency inspectors arrived in Tehran yesterday for talks on Iran’s nuclear program. “The next significant hurdle is a formal announcement on the restructuring of the Greek debt,� said Ric Spooner, chief analyst at CMC Markets in Sydney. “On the supply side for oil, investors will be keeping an eye on any developments from Iran in response to the ban� of its crude exports to the EU, he said. Crude for March delivery fell as much as 82 cents to $98.74 a barrel in electronic trading on the New York Mercantile Exchange. It was at $98.77 at 3:02 p.m. Singapore time. The contract declined 14 cents to $99.56 on Jan. 27, the lowest close since Jan. 25. Prices are 0.1 percent higher this month. Brent oil for March settlement was at $110.95 a barrel, down 51 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $12.19, compared with $11.90 on Jan. 27 and a record $27.88 on Oct. 14. Iran Imports Iran has been at loggerheads with Western countries over accusations its nuclear program is a cover for developing weapons, a charge the government denies. EU foreign ministers agreed on Jan. 23 to ban Iranian oil imports starting in July and freeze the assets of the country’s central bank. A cut in oil imports from Iran is likely to hurt South Korea’s economy, Finance Minister Bahk Jae Wan said today in Seoul. The nation needs a “gradual approach� to cuts in the Iranian oil imports, Bahk said. Efforts to hold the 17-member euro area together with more stringent fiscal rules are colliding with obstacles in Greece, where the debt crisis began in 2009. Greek bondholders have been pushed to cede more after agreeing last year to a 50 percent cut in the face value of more than 200 billion euros of debt. Hedge funds and other large speculators raised bullish oil wagers by 10,079, or 5.2 percent, to 204,044 contracts in the seven days ended Jan. 24, according to the Commodity Futures Trading Commission’s Commitment of Traders report on Jan. 27. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Mike Anderson in Singapore at manderson34@bloomberg.net.

Source