Forexpros – Crude oil futures fell Thursday, hitting a six week low, as Greek default worries and U.S. demand concerns placed downward pressure on the commodity.
On the New York Mercantile Exchange, light sweet crude futures for March settlement traded at USD95.97 a barrel during mid U.S. trade falling 1.68%.
Crude oil hit a low of USD95.44 a barrel and touched a high of USD97.98 a barrel during the session.
Strength in the U.S. dollar helped support crude oil prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.09% to 79.11.
Dollar strength generally depresses commodity prices, as it decreases their appeal as an alternative asset and makes dollar priced commodities more expensive for holders of other currencies.
Greek tensions increased when ,Eurogroup head, Jean Claude Juncker stated talks with private creditors on the Greek debt restructuring plan have proven to be “ultra difficult”.
However, after EU Economic and Monetary Affairs Commissioner Olli Rehn stated that Greek debt negotiations were at an advanced staged with a conclusion pending.
The deal is supposed to be approved at an extraordinary meeting of EU finance ministers on Monday.
This agreement is critical for Greece to avoid default on March 20 by obtaining its next tranche of bailout funds.
Meanwhile, slowing U.S. oil demand added to the sessions bearishness. Official data on Wednesday indicated that U.S. supplies climbed by a more than expected 4.2 million barrels last week.
Additional U.S. data indicated that the number of filings for unemployment assistance last week dropped more than expected to 367,000 beating estimates for a decline of 373,000.
Economists believe jobless claims below 400,000 indicate an improving labor market. The number has remained below 400,000 in 12 of the last 14 weeks.
Oil traders continue to watch Iranian and Sudanese tensions very closely due to supply disruption concerns.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery gave back 0.37% to trade at USD111.14 a barrel, up USD15.17 on its U.S. Counterpart.
Interestingly, Citigroup expects this spread to widen to USD20 a barrel as increased North Dakota production and stock builds at the U.S. benchmark delivery point of Cushing, Oklahoma continues to pressure NYMEX oil.
The spread hit a high of USD27.88 a barrel in October 2011.
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