Europe under S&P credit watch, oil investments pare gains
Crude oil futures posted declines on the New York commodity index today, paring down the gains they have amassed over the past two trading sessions amid heavy trader speculation that Europe’s leaders will unable to come up with any sort of viable solution to tame the region’s rapidly spiralling debt crisis. The euro declined against the dollar, and oil investments retreated along with it, falling from their three-week peaks, as global confidence in the future of the euro zone seems to be waning.
The oil commodity futures lost more than 0.6% on the sector charts, when Standard & Poor’s announced that Germany and France are now teetering on the verge of having their AAA credit ratings taken away. Fifteen major euro zone nations have already been put up for review with potential downgrades in store for many. Oil investments received some minor support from the U.S., where the domestic Energy Department announced that despite a slight rise in gasoline and distillate inventories, crude stockpiles have fallen once again. The spread between West Texas Intermediate and Brent held around the $9 per barrel mark.
WTI crude for delivery in January fell 61 cents to settle at $100.38 per barrel in electronic trading on the New York Mercantile Exchange. Futures for the volatile commodity oil are up 12% for the year overall, however, its future remains vague.
Brent crude oil prices for January settlement lost 68 cents and settled at $109.13 per barrel on the ICE Futures Exchange in London. Oil investments in the European contract were bolstered yesterday when Iran’s military brought down a U.S. drone, causing another round of threats exchanges between the two nations.
Six major European nations are currently the primary targets for S&P’s credit watch. The outcome of their ratings will largely depend on the solutions that the UN leaders will be able to extricate from their next meeting scheduled to take place this week.