Oil investments down along with first round of pipeline hopes
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Crude oil prices fell on the commodity market today amid lingering concerns over the euro zone and the state of health of the global economy. Trader speculation that the euphoria over the new U.S. pipeline project may have been overdone also affected oil investments.
West Texas Intermediate crude oil futures for delivery in December, a contract which expired today, fell $3.77 to settle at $98.82 per barrel in electronic trading on the New York Mercantile Exchange, with the bulk of the day’s losses coming late in the session. Oil investments in the U.S. benchmark rose more than 3% just yesterday, pushing the commodity oil to its highest peaks since May.
Persisting worries over the massive debt in the euro zone also weighed down on the commodity index. Italy’s soaring bond yields are still without answer, and both Spain and France are now seeing their own bond figures spike. Spain’s yields especially are in troubled waters, mirroring Italy in their surge past the 7% mark. Europe’s continuous struggle with debt led to renewed concerns that the economic downturn would spared elsewhere, triggering another round of a global recession. Crude oil futures and oil investments sank as a result of abundant trader speculation.
Analysts have stated that the optimism surrounding the new pipeline project was simply over-exaggerated and that crude oil was simply giving back some of the leads it built up as a result. The actuality remains that the pipeline will only produce viable long-lasting effects in the second quarter on next year, and only if the project will not encounter any administrative or environmental obstacles on the way. In the meantime, the ongoing and rapidly spiralling European debt crisis will continue to remain the primary affecting factor for crude oil futures and oil investments on the commodity index.