Forexpros – Crude oil futures declined on Tuesday, after ratings agency Standard & Poor’s put 15 euro zone countries on watch for downgrades, while ongoing concerns over a disruption to supplies from Iran limited losses.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD100.75 a barrel during European morning trade, shedding 0.25%.
It earlier fell by as much as 0.55% to trade at a daily low of USD100.38 a barrel.
In a statement released late Monday, S&P said that ratings could be cut by one level for triple-A rated countries Austria, Finland, Germany, Netherlands and Luxembourg and flagged a potential two-notch downgrade for France.
The ratings agency added that it plans to announce any ratings changes “as soon as possible” after Friday’s European Union summit.
The announcement came after French President Nicolas Sarkozy and German Chancellor Angela Merkel outlined proposals to enforce stricter budget rules in the euro zone, to be discussed at Friday’s summit.
The euro zone accounted for nearly 16% of global oil consumption in 2010, according to data from British Petroleum.
Losses were limited as crude prices continued to draw support from ongoing tensions over Iran’s nuclear program and a potential disruption to oil exports from the country.
Last week, the U.S., the U.K. and the European Union tightened their sanctions against the Middle Eastern country, following a United Nations report which concluded that the Iranian government was working on a nuclear weapon.
U.K. financial service provider Barclays said the situation in Iran “is unlikely to get better any time soon.”
In a report published late Monday the lender said that, “Retaliationary efforts from Iran are also feared given its influence over oil trade flows through the Strait of Hormuz.”
Iran is the world’s fourth largest oil producer, pumping nearly 5% of the world’s oil in 2011 and the second biggest exporter among the Organization of the Petroleum Exporting Countries.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery dipped 0.15% to trade at USD109.63 a barrel, with the spread between the Brent and crude contracts standing at USD8.88 a barrel.
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