Forexpros – Crude oil futures pared gains in holiday-thinned trade on Thursday, pulling back from the daily high after German Chancellor Angela Merkel reiterated her opposition to the creation of euro bonds.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD96.50 a barrel during U.S. morning trade, edging 0.34% higher.
It earlier rose by as much as 1.4% to trade at a daily high of USD97.19 a barrel.
Trading volumes were expected to be light with NYMEX Floor trading shut for the U.S. Thanksgiving holiday. Electronic transactions would be booked with Friday’s trades for settlement purposes.
Speaking at a joint news conference with France’s Nicolas Sarkozy and Italy’s Mario Monti following a meeting earlier, Merkel reiterated her belief that joint bonds would remove incentives for individual states to improve their fiscal discipline.
The U.S. dollar turned higher against the euro following the comments, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.08% to trade at 79.37, reversing an earlier loss of as much as 0.4%.
A stronger dollar makes U.S. commodities more expensive for importers holding other currencies such as yen or euro.
Also Thursday, ratings agency Fitch downgraded Portugal’s sovereign rating to junk status, saying it expects gross domestic product to contract by 3% in 2012, making the government’s deficit reduction plan far more challenging to execute.
Crude prices remained supported amid fears over a disruption to oil supplies in the Middle East.
Saudi media outlets reported earlier that two people were killed and three wounded in an exchange of fire between Saudi security forces in the oil-producing Eastern Province.
Meanwhile, Iranian President Mahmoud Ahmadinejad said in a speech broadcast on state television earlier that Iran would not back down from its nuclear ambitions despite fresh Western sanctions announced this week.
Saudi Arabia is the world’s largest oil producer and biggest exporter among OPEC members, while Iran is the world’s fourth largest oil producer and the second biggest exporter among OPEC members.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery rose 0.43% to trade at USD107.47 a barrel, with the spread between the Brent and crude contracts standing at USD10.97 a barrel.
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