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Forexpros – Crude oil futures plunged on Monday after China’s export growth dipped to the weakest pace since 2009. Rating agency, Moody’s added to the bearish sentiment by stating it plans to review the credit ratings of euro zone nations in the first quarter of 2012.
On the New York Mercantile Exchange, light sweet crude futures for January settlement traded at USD97.78 a barrel during late U.S. trade, falling 1.63%. It earlier hit a daily high of USD99.67 a barrel.
Strength in the U.S. dollar helped depress crude prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, soared 1.49% to trade at 80.31.
Dollar strength normally hurts commodity prices, as it lowers their appeal as an alternative asset and makes dollar priced commodities more expensive for holders of other currencies.
Moody’s move to review the credit ratings of the euro zone nations due to the failure of the European summit to make any real progress against the debt crisis accelerated oil’s decline.
Adding to the negativity, China’s exports only rose 13.8% in November, failing to beat the previous month gain of 15.9% in October.
“We expect prices to stay under pressure as long as macro fears stay high,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt told Bloomberg . He went on to explain, “At the moment it’s Europe, providing contagion that other countries will be dragged into it, that’s keeping demand away. China’s growth may disappoint if European jitters continue.”
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery dropped 1.24% to trade at USD107.06 a barrel, up USD9.28 on its U.S, Counterpart.
This nearly USD10.00 spread has been narrowing recently, but is still historically high. The two contracts traditionally trade
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