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Crude Trades Near One-Week Low on Worsening European Crisis - report

Oil erased gains in New York to trade near its lowest in a week amid concern that Europe's debt crisis is deepening and will cut demand for fuels, according to Bloomberg. West Texas Intermediate pared an earlier advance of as much as 0.9%.

The euro fell for a fifth day against the yen after Moody's Investors Service cut its ratings outlook on Germany yesterday amid speculation that Europe's turmoil will engulf Spain and Italy. Oil rose earlier after Chinese manufacturing data signaled the world's second-largest crude user may be pulling out of an economic slowdown.

Oil for September delivery was at US$88.01 a barrel, 13 cents lower in electronic trading on the New York Mercantile Exchange, at 12.11 p.m. London time. The contract dropped $3.69 to $88.14 yesterday, the lowest since July 13. Prices are down 11% this year.

Brent crude for September settlement slipped 21 cents to $103.05 a barrel on the London-based ICE Futures Europe exchange. The European benchmark's premium to West Texas Intermediate was at $15.04, compared with $15.12 yesterday.

Oil in New York has technical support at $86.59 a barrel, along the lower of two so-called leading span lines that define an 'ichimoku cloud' on the daily chart, according to data compiled by Bloomberg. The cloud is an area where buy orders tend to be clustered. Last week's price rise stalled near the upper boundary, signaling chart resistance.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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