Forexpros – Crude oil futures traded slightly higher despite renewed euro zone debt fears Wednesday.
On the New York Mercantile Exchange, light sweet crude futures for February settlement traded at USD103.03 a barrel during mid U.S. trade easing higher by 0.08%.
It earlier hit a daily high of USD103.69 a barrel.
Strength in the U.S. dollar did little to squelch the bullish crude price move.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.55% to 80.39.
Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities cheaper for holders of other currencies.
Crude prices initially dropped on reports that Italy’s largest bank, UniCredit planned to sell shares in an effort to raise capital causing concerns that the euro zone debt crisis is far from over.
However, crude oil prices rocketed higher by more than USD1.00 on word that the European Union agreed to ban Iranian exports.
Meanwhile, a euro zone purchasing managers survey came in at 48.3, reading below 50 indicate contraction, adding to potential demand decrease concerns.
EU spokesperson, Michael Mann, told Bloomberg, “We want to tighten sanctions on Iran”, resulting in the upward pressure despite the euro zone worries.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery traded higher by 0.70% to trade at USD112.92 a barrel, up USD9.89 on its U.S. Counterpart.
This nearly USD10.00 spread has been narrowing recently, but is still historically high. The two contracts traditionally trade within USD1.00 of each other.
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