By Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) — Crude oil futures dropped on Wednesday amid rising hopes of a deal between Iran and the International Atomic Energy Agency, while fears of a Greek euro exit generated selling pressure.
Crude for July delivery CLN2 -0.72% fell 71 cents, or 0.8%, to $91.15 a barrel, dropping for a second straight day.
Prices came under pressure as six world powers initiated talks with Tehran to discuss the future of the Iranian nuclear program. Iran has so far showed willingness to allow United Nations inspectors to start probes into suspicions that the country secretly has developed atomic weapons, according to media reports.
“If there were to be further rapprochement between the conflicting parties, or indeed if the prospect of an easing of sanctions were to be raised, the risk premium would be likely to fall further, bringing oil prices down accordingly,” analysts at Commerzbank said in a note.
Turmoil and uncertainty about Greece’s futures in the euro zone also added downward pressure to oil prices. Greek Prime Minister Lucas Papademos told Dow Jones Newswires late Tuesday that a Greek exit from the euro would be “catastrophic” for Greece, but that preparations were being considered for an exit of the shared currency.
He later clarified in an interview with CNBC that he wasn’t aware of any specific preparations under way in Greece or elsewhere in Europe.
A firmer dollar further spurred a downward trend for crude oil. The ICE dollar index DXY -0.04% , which tracks the greenback against a basket of six major currencies, rose 0.3% to 81.70.
Other energy futures followed oil prices south. Gasoline for June delivery RBM2 -0.41% shed 0.6% to $2.92 a gallon, while heating oil for the same month slipped 0.9% to $2.84 a gallon.
June natural gas NGM12 -1.48% gave up 1.1% to $2.75 per million British thermal units.
Sara Sjolin is a MarketWatch reporter, based in London.
