Futures dropped as much as 1.5 percent, adding to the 1.5 percent lost in the five days to Dec. 9. European leaders will have to quickly implement an agreement to strengthen budget rules to regain market confidence, according to German Finance Minister Wolfgang Schaeuble. Iran’s Oil Minister Rostam Qasemi said some members of the Organization of Petroleum Exporting Countries should reduce output to accommodate the return of shipments from Libya and increased Iraqi exports.
We expect prices to stay under pressure as long as macro- fears stay high,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said by phone. “At the moment it’s Europe, providing contagion that other countries will be dragged into it, that’s keeping demand away. China’s growth may disappoint if European jitters continue.”
Crude for January delivery declined as much as 87 cents to $98.54 a barrel in electronic trading on the New York Mercantile Exchange. It was at $98.07 at 10:16 a.m. London time. Prices are up 7.3 percent this year after climbing 15 percent in 2010.
Brent oil for January settlement lost as much as $1, or 0.9 percent, to $107.62 a barrel on the ICE Futures Europe exchange. The European benchmark contract was at a premium of $9.35 to New York-traded West Texas Intermediate grade. The spread was a record $27.88 on Oct. 14.
Europe Accord
Euro-area policy makers will focus on implementing last week’s accord to strengthen budget rules and provide an additional 200 billion euros ($267 billion) to the euro fund as quickly as possible, Schaeuble told ARD television yesterday.
The 27 member states of the European Union accounted for 16 percent of global oil demand last year, based on BP Plc’s annual Statistical Review of World Energy. The U.S., the world’s largest oil user, consumed 19.1 million barrels a day, or 21 percent of the total.
“The European package was something that was expected but there are concerns about implementation and enforceability,” said Jonathan Barratt, a managing director at Commodity Broking Services Pty in Sydney, who predicts OPEC will keep quotas unchanged at its meeting in Vienna.
Oil in New York has technical support along the middle Bollinger Band on the daily chart, according to data compiled by Bloomberg. This indicator is at about $97.80 a barrel today. Buy orders tend to be clustered near chart-support levels.
OPEC Meeting
Iran will propose that OPEC, which raised output this year in the absence of Libyan exports, scale back supply, Qasemi was cited as saying yesterday by the state-run Mehr news agency. Eleven of the organization’s members, all except Iraq, have formal production targets.
Libya pumped 500,000 barrels a day on average in November, from a low of 45,000 barrels in the midst of the rebellion against former leader Muammar Qaddafi. Iraq’s daily output last month reached 2.7 million barrels, according to Bloomberg estimates.
Saudi Arabia, the world’s biggest state-owned exporter, will supply full volumes of crude under term contracts to buyers in Asia and Europe next month, according to refinery officials with knowledge of the matter. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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