By Myra P. Saefong and Sara Sjolin, MarketWatch
SAN FRANCISCO (MarketWatch) — Oil futures moved lower on Monday, as nervousness ahead of another Eurogroup meeting on Greece kept investors on the sidelines, while a firmer dollar added pressure on prices as well.
Crude for January delivery CLF3 -0.74% slumped 70 cents, or 0.8%, to $87.58 a barrel on the New York Mercantile Exchange. Futures prices climbed 1% on Friday.
January brent UK:LCOF3 -0.42% drifted lower, off 47 cents, or 0.4%, to $110.91 a barrel on ICE Futures in London.
Apparently, the oil markets are “not participating in today’s Cyber Monday spirit of ‘buy, buy, buy,’ with the windscreen wiper of risk setting about wiping off Friday’s gains,” said Matt Smith, commodity analyst at Schneider Electric in Louisville, Ky.
The troika of Greek lenders, the International Monetary Fund, the European Commission and the European Central Bank, “once again give general markets a bearish hue as they meet ... to figure out how to plug Greece’s deficit,” he said. “Given the recent rather public disagreements among the three entities, there is good deal of skepticism that there will be an impasse passed in today’s meeting.”
Euro-zone finance ministers were due to meet later Monday in Brussels, renewing efforts to sketch out a debt-sustainability road map for the country.
The group failed last week to reach a final agreement, which is necessary for Greece’s lenders to disburse its next tranche of bailout money, but said it made progress in “identifying a consistent package of credible initiatives.” See: Another Greece decision delayed — a new pattern here?
Meanwhile, continuing geopolitical tension in Middle East North Africa region sees focus on Egypt, after widespread protests over the weekend, said Smith, in a report.
Egypt’s top judges condemned President Mohammed Morsi’s Thursday decision to grant himself extensive new powers that include exempting his decisions from judicial review. See: Egypt judges condemn Morsi’s power grab.
“If there were to be a prolonged phase of instability in Egypt, this could have ramifications for the entire region, which is responsible for producing 25% of the world’s crude oil,” analysts at Commerzbank said in a note.
For now, a modestly firmer dollar weighed on oil prices on Monday. The ICE dollar index DXY +0.04% , which measures the greenback against a basket of six other currencies, rose to 80.233 from 80.190 in Friday trading. See: Dollar edges higher against rivals.
Strength in the U.S. currency tends to add pressure on dollar-denominated commodities, because they become more expensive for other currency holders.
Other energy futures traded lower as well, with natural gas leading the decline.
December natural gas NGZ12 -4.05% sank 15 cents, or 3.8%, to $3.75 per million British thermal units.
Heating oil for December delivery HOZ2 -0.49% fell 2 cents, or 0.7%, to $3.06 a gallon, while gasoline for the same month RBZ2 -0.53% fell 2 cents, or 0.6%, to $2.73 a gallon.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
