Crude oil slides in mid-day U.S. trade

Forexpros – Crude oil futures moved lower in U.S. trade Friday, falling back from sharp gains in the previous session posted after the announced settlement between European leaders to boost the rescue fund for debt threatened euro-zone nations.

On the New York Mercantile Exchange light, sweet crude futures for December delivery traded at USD93.30 a barrel during early Asian trade, dropping 0.71%, after hitting a daily high of USD93.99.

Crude future rallied more than 4% on Thursday, as investors welcomed the announcement from European officials of their long-awaited plan to address the euro-zone debt threat with an expansion of the European Financial Stability Facility to USD1.4 trillion.

The agreement included a vow from private investors to write-down 50% of their holdings in Greek government debt, as well a recapitalization of European banks with assistance from the International Monetary Fund.

“Few expected a comprehensive plan to be delivered, but for all its imperfections the announcement showed a degree of unity within Europe towards a common goal and that politicians had started to understand the magnitude of shifts that were needed to calm market concerns,” said global investor service provider JP Morgan on the Brussels-brokered deal.

“For oil and other commodities, it remains to be seen how much the latest from Europe changes the global, and more importantly, emerging-market economic outlook,” JP Morgan added.

Encouraging data on U.S. spending helped to limit losses for oil, as the Bureau of Economic Analysis reported that personal spending rose to a seasonally adjusted 0.6% in September from 0.2% in the previous month, in line with market expectations.

A rising U.S. dollar helped to provide downward pressure for oil futures, as dollar-denominated futures contracts tend to fall when the dollar rises.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.11% to 75.19.

On the ICE Futures Exchange Brent oil futures for November delivery sank 1.80% to trade at USD110.06.