Forexpros – Crude oil futures were down sharply on Monday, falling to an almost two-week low as mounting concerns over sovereign debt issues in the euro zone and the U.S. saw investors shun riskier assets.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD95.72 a barrel during European morning trade, tumbling 1.96%.
Oil’s losses came as concerns over rising borrowing costs in many euro zone members added to fears that the region’s debt crisis is spreading to core economies.
Elsewhere, official data showed that Japanese exports fell in October, down for the first time in three months, as the persistently strong yen hit demand. Japan is the world’s third largest crude oil consumer.
Market sentiment was also hit by speculation that a U.S. congressional “super committee” was set to announce that it had failed in a three-month-long effort to draft a USD1.2 trillion deficit reduction plan.
Oil prices had rallied to a six-month high last week as news of the reversal of a major U.S. oil pipeline boosted hopes that a supply glut in the U.S. would be eased.
Enbridge, Canada’s largest transporter of crude oil, said it would reverse the Seaway pipeline that moves oil from the Gulf of Mexico to Cushing, Oklahoma, where there is a supply bottleneck.
Meanwhile, on the ICE Futures Exchange, Brent oil futures for January delivery shed 0.97% to trade at USD106.53.
Brent crude’s losses came as concerns over the debt crisis in the euro zone overshadowed fears that ongoing unrest in Syria and Egypt as well as tensions over Iran’s nuclear program could disrupt Middle Eastern output.
On Sunday, the energy minister of OPEC president Iran told Al Jazeera television that his country could use oil as a political tool in the event of any future conflict over the country’s nuclear program.
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