Forexpros – Crude oil futures fluctuated between small gains and losses on Wednesday, as ongoing concerns over the sovereign debt crisis in the euro zone countered fears over a disruption to Iranian oil supplies.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at USD102.17 a barrel during European morning trade, easing down 0.07%.
The crude contract traded in a range between USD101.61, the daily low and USD102.47, the session’s high.
Appetite for riskier assets was dampened as concerns over euro zone sovereign funding continued to weigh on sentiment ahead Spanish and Italian government debt auctions on Thursday and Friday respectively.
The yield on 10-year Italian government bonds remained above the 7% threshold seen as unsustainable, at 7.05%, while the yield on Spanish 10-year bonds was at 5.35%.
Adding to fears over the region’s financial crisis, bank deposits at the European Central Bank’s overnight facility hit yet another all-time high, underscoring the unwillingness of European lenders to lend to each other.
Markets were looking forward to a meeting between German Chancellor Angela Merkel and Italian Prime Minister Mario Monti later in the day in Berlin, while International Monetary Fund Chief Christine Lagarde was to meet French President Nicolas Sarkozy in Paris.
Meanwhile, oil traders continued to monitor tensions between Iran and the West after Iran’s Fars news agency reported that an Iranian nuclear scientist was killed in a bomb explosion in northern Tehran earlier in the day.
Oil prices have been well-supported in recent sessions on fears that Iran may make good on threats to cut off access to the Strait of Hormuz, a narrow passageway that connects the oil-rich Persian Gulf nations with the rest of the world.
Markets were also awaiting key weekly government data on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The report was expected to show that U.S. crude oil stockpiles rose by 1.0 million barrels last week, while gasoline supplies were forecast to increase by 2.0 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 0.4 million barrels last week, while total gasoline supplies increased by 1.89 million barrels.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery rose 0.25% to trade at USD113.56 a barrel, with the spread between the Brent and crude contracts standing at USD11.39 a barrel.
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