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Commodities: Crude settles below $99 a barrel

Date: Wednesday 25 Jan 2012

Crude oil futures closed Tuesday's session below $99 a barrel as the US said it would impose new sanctions on Iran over its alleged nuclear programme and as markets digested the European Union's decision to implement its own ban on Iranian imports from July.

Frustration over lack of progress on Greek debt also numbed buyer interest. Greece was expected to reach an agreement over the weekend with its private bondholders to write down around €100bn in debt.

On Monday euro zone finance ministers rejected an offer made by bondholders to help restructure Greece's debts and negotiators were forced to return to the table on Tuesday. With no agreement as yet, concern is growing concern that a Greek debt default could hit energy demand.

The stronger dollar pressured demand for oil as it makes it more expensive for holders of other currencies. The dollar index, which measures the US currency against a basket of six other currencies, hit an intra-day high of 80.184 before retreating.

Crude for March delivery fell 63 cents to settle at $98.95 a barrel on the New York Mercantile Exchange.

Brent crude on the ICE futures exchange fell38 cents to trade at $110.20 a barrel.

The dollar's strength sapped buyer interest in gold on Tuesday as did lighter than usual demand from Asia with markets closed for the Lunar New Year holiday.

Gold for delivery in February declined $13.80 to settle at $1,664.50 an ounce on the Comex division of the New York Mercantile Exchange after falling to an intra-day low of $1,661.

Silver for March delivery lost 30 cents at $31.98 an ounce and copper for March delivery rose 1 cent to $3.81 a pound.



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