Crude oil futures were lower Monday as Iran postponed a decision over the weekend to halt oil exports to the European Union, taking some of the immediate risk of a supply disruption out of the market.
Crude oil futures were lower Monday as
Iran
postponed a decision over the weekend to halt oil exports to the European
Union, taking some of the immediate risk of a supply disruption out of the
market.
At 1245 GMT, the front-month March contract on the New York Mercantile Exchange
was trading down 60 cents or 0.6%, at $98.96 a barrel. The front-month March
Brent contract on
London
's ICE
futures exchange was down 21 cents, or 0.2%, at $111.25 a barrel.
Iran
's
decision to delay the vote on its oil exports to the EU comes as United Nations
nuclear inspectors are allowed back into the country, raising hopes of a
resolution in the escalating crisis between the west and the Islamic Republic.
And with
Libya
now
pumping around 1.3 million barrels a day, not far off its pre-war levels of 1.6
million barrels a day, supply worries aren't so much in the spotlight for the
moment, analysts said.
Indeed it is now demand worries that are starting to dominate sentiment, as
Friday's slightly weaker-than-expected
U.S.
gross
domestic product data weighed on prices and as the Greek sovereign debt crisis
lumbers on with no clear end in sight.
"This [
U.S.
] GDP
report should be seen as a first warning sign," said JBC Energy in a note.
"The downside risks are clearly back on the table and it is obvious why
the Fed has extended its zero interest rate policy before economic figures take
a turn for the worse."
Increasing jitters about Greece's sovereign debt woes spreading to Portugal and
Italy, as yet another EU summit on the crisis takes place in Brussels Monday,
are only adding to worries about future oil demand in the region, said
analysts.
"In the short term [oil] supplies are adequate, it is the demand side that
is uncertain," said VTB Capital's vice president of commodities research
Andrey Kryuchenkov. "Should
Greece
default in March there will be repercussions for the euro and financial markets
and eventually that will filter through to oil demand."
The euro fell against the dollar in line with weaker European stock markets and
soaring
Portugal
government bond yields, adding to investor concerns that
Greece
still
hasn't secured a deal with its private creditors on restructuring its debt amid
growing worries that
Greece
's
funding needs might be bigger than originally thought.
The stronger dollar against the euro typically weakens oil prices as it makes
the commodity more expensive to purchase for holders of other currencies.
At 1250 GMT, the ICE's gasoil contract for February delivery was up $3.50, or
0.4%, at $957.25 a metric ton, while Nymex gasoline for February delivery was
down 378 points, or 1.3%, at $2.8890 a gallon.
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