INV: Crude oil futures slump to 3-week low in risk-off trade
Investing.com - Crude oil futures fell to a three-week low during U.S. morning trade on Monday, as concerns over political uncertainty in the euro zone dampened appetite for riskier assets.
On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD95.26 a barrel during U.S. morning trade, down 0.5% on the day.
New York-traded oil prices fell by as much as 0.7% earlier in the day to hit a session low of USD94.97 a barrel, the weakest level since January 23.
Oil’s losses came as the U.S. dollar strengthened against most of its major counterparts, weighing on dollar-denominated oil futures.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.2% to trade at 80.44, the highest level since January 10.
Oil traders monitored political developments in the euro zone, amid uncertainty ahead of upcoming elections in Italy and renewed political tensions in Spain where the government has become embroiled in a corruption scandal.
New York-traded oil prices came under additional pressure amid ongoing concerns over a glut of oil in the Midwest.
Industry group IIR Energy said on Friday that Phillips 66's 306,000-barrels-a-day refinery in Wood River, Illinois, will shut down in late February for maintenance.
The report underlined concerns that more crude would be added to a glut of oil supplies already in storage at Cushing, Oklahoma, the trading hub for NYMEX oil.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery fell 0.9% to trade at USD117.86 a barrel. The London-traded Brent contract touched a nine-month high of USD118.89 a barrel on Friday.
The spread between the Brent and crude contracts stood at USD22.60 a barrel.
The spread between the two contracts has been widening ever since operators of the Seaway Pipeline said on January 31 that restrictions will limit flows on the key pipeline until the fourth quarter of 2013.
The spread shrunk to USD14.50 a barrel in mid-January on speculation that Seaway would be operating at full capacity.
