Oil fell for a third day in New York as bets that Europe's debt crisis will worsen and curb fuel demand countered concern that tension with Iran may disrupt Middle East crude exports.
Futures declined as much as 0.5 per cent before German and French leaders meet in Berlin today as they seek to craft a plan for rescuing the euro over the next three months. The US will act to reopen the Strait of Hormuz if Iran blocks the channel, Joint Chiefs of Staff chairman General Martin Dempsey said in an interview on the CBS "Face the Nation" program yesterday. Brent oil's premium to West Texas Intermediate crude rose to the highest in almost two months.
"It's a matter of two factors for the market," said Ric Spooner, a chief analyst at CMC Markets in Sydney. "We have concerns about potentially significantly reduced economic activity emanating from Europe, and Iran. Any potential disruptions have to be taken seriously because it won't take much to put us into a supply problem."
Crude for February delivery slipped as much as 46 cents to $US101.10 a barrel in electronic trading on the New York Mercantile Exchange. It was at $US101.26. The contract fell 0.3 per cent to $US101.56 on Jan. 6, the lowest close since Dec. 30.
Brent oil for February settlement was at $US113.17 a barrel, up 11 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract's premium to WTI was at $US11.91, the highest gap based on closing prices since Nov. 15. The difference rose to a record $US27.88 on Oct. 14 as the uprising in Libya curbed supplies of light, sweet crude. 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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