Forexpros – Crude oil futures dropped Monday for the third day as German industrial output declined and Iranian supply tensions eased.
On the New York Mercantile Exchange, light sweet crude futures for February settlement traded at USD101.31 a barrel during late U.S. trade giving falling 0.25%.
It earlier hit a daily high of USD102.14 and a low of USD100.11 a barrel.
Weakness in the U.S. dollar did little to lift oil prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.32% to trade at 81.29.
Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.
The selling started as Germany reported production fell 0.6% in November signaling that growth in Europe’s largest economy may have ended.
In addition, Saudi Arabia reiterating it will ramp up production should Iran attempt a blockade of the Strait of Hormuz and Goldman Sachs stating the probability of such a blockade, in the first place, is very low lessened supply tensions in the volatile region.
However, supply fears were stroked when Societe Generale stated that a blockade could send the price of oil as high as $200.00 per barrel for a limited period.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery fell 0.65% to trade at USD112.33 a barrel, up USD11.02 on its U.S. Counterpart.
This greater than USD10.00 spread is near historic highs. The two contracts traditionally trade within USD1.00 of each other.
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