Brent and WTI oil investments lose ground as Greek bailout comes under question
The commodity and gold sectors retreated on global cues today, breaking last week’s four-day winning streak, which was capped off by a strong rally up the charts on Friday due falling unemployment claims in the US. The sharp fall in oil investments was explained by newly-arisen issued surrounding the European debt crisis, namely Greece’s apparent distaste for the bailout package drawn up for its addled economy. All of gold, raw metal and oil investments slipped after Greece entered deliberations about the acceptance of the new austerity measures.
This is the second bailout plan offered to the struggling state.
Traders sold off their crude stock in wait for Greece’s decision, with Brent prices losing 51 cents and settling at $114.07 per barrel on the ICE Futures Exchange in London. The benchmark commodity oil rose more than 2% on Friday alone.
West Texas Intermediate crude oil futures for delivery in March suffered greater losses, dipping $1 to $96.84 per barrel in electronic trading on the New York Mercantile Exchange. The spread between WTI and Brent widened as a result, standing at $17 at the moment.
Though the mounting tension in Iran kept a floor under oil prices, the persisting struggle that Europe has been displaying regarding its debt issues have again taken over the sector’s concerns, to the dismay of many savers and traders figuring out how to invest. On the off-chance that Greece actually refuses its second bailout offering, the country will inevitably collapse into a default, which would then likely set off a chain reaction amongst the weaker states in the euro zone.
Gold futures mirrored the fall of commodity investments, losing 0.6% and settling at $1,714.89 per troy ounce. The metal commodity was negatively affected by the drop-off in US unemployment, as the potential lack of monetary easing removed the safety cushion from beneath the market.