Forex Pros – Crude oil futures were down for a third day on Monday, hovering close to a four-month low as comments from the International Energy Agency over the weekend and a broadly stronger U.S. dollar dragged prices lower.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD90.52 a barrel during European morning trade, dropping0.83%.
It earlier fell to USD89.84 a barrel, the lowest price since last Thursday, when prices hit a four-month low of USD89.70.
IEA Executive Director Nobuo Tanaka said at an industry conference in Beijing over the weekend that the agency would continue to monitor energy markets and that it was ready “to act again if needed” to stabilize prices.
“We are waiting for market reaction and assess the situation and decide further action after 30 days,” Mr. Tanaka said on Saturday.
In addition, Mr. Tanaka revealed that the Paris-based group consulted Saudi Arabia, China and India before it decided to tap its emergency reserves for only the third time in its history.
Crude prices tumbled 7.7% in the two days following last Thursday’s release of 60 million barrels of oil from emergency reserves in response to loss of supplies from Libya.
Meanwhile, ongoing concerns over Greece’s debt woes saw the U.S. dollar strengthen, making dollar-denominated oil futures contracts more expensive for buyers holding other currencies.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.49% to trade at 76.46, after rising earlier to 76.58, the highest since April 1.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery tumbled 1.85% to trade at USD103.73 a barrel, the lowest price since February 18.
The Brent contract was up USD13.21 on its U.S. counterpart, the smallest gap between the two contracts since May 25.
Barclays said in a report earlier that, “Although some of the price movement likely reflects technical portfolio adjustments, it is revealing that Brent has moved back to levels last seen in February, possibly signaling weakness in demand.