Italy’s soaring bond yields, Europe’s slow recovery pace weigh on oil investments
Crude oil prices lost minor ground on the New York commodities market today, after facing the typical resistance that accompanies approaching the $100 per barrel mark. Re-surfacing trader worries over Europe’s sluggish attempts at handling its ongoing debt crisis also put pressure on global oil investments.
The newly appointed governments in two of Europe’s weakest financial links, Greece and Italy are currently in the process of finally implementing the reforms those countries need in order to remain economically viable in the coming year. However, investors and analysts are beginning to doubt whether the new austerity measures will be timely enough to salvage what remains of the Greek and Italian economies. Italy’s bonds have soared to the highest the euro zone has ever seen, causing a tumble in oil investments in the region. The subsequently fallen euro has also done some damage to the commodity index, as the dollar-prices commodity futures are losing their international clientele.
West Texas Intermediate crude oil futures for delivery in December currently sit at $98.18 per barrel in electronic trading on the New York Mercantile Exchange. The American benchmark commodity oil rose as high as $99.69 per barrel during intraday trading yesterday, bringing crude oil close to breaking past the notoriously resistant $100 threshold. The market factors lifting oil investments however were not strong enough to push the commodity oil over the mark, causing a slight tumble in futures as a result.
Worse than expected industrial production rates in the U.S. and Europe also played a part in keeping crude oil down, as expectations of global demand growth are proving to be overdone. The high jobless rates in the U.S. are another issue to be dealt with if crude oil prices and oil investments are to rise above the $100 per barrel mark by the end of the week.