Saturday, October 29, 2011

Dan Strumpf: Crude Oil Pauses As Europe Debt Questions Persist

Crude oil futures edged lower Friday, as traders paused amid uncertainty over the details of the European Union's rescue package for Greece. Light, sweet crude for December delivery settled 64 cents, or 0.7%, lower at $93.32 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled down $2.17, or 1.9%, to $109.91 a barrel.

Futures ended slightly lower as market participants reflected on the rescue package unveiled by European Union officials on Thursday. The package, aimed at staving off a disorderly default of Greece, sent crude futures soaring on Thursday. But questions persisted over how the EU will implement the plans and if they will be enough to solve the debt woes.

"The lack of details out of this European summit really questions the feasibility of this euro zone debt deal," said Peter Donovan, vice president at Vantage Trading, an oil options brokerage in New York.

Oil market participants were closely eyeing the negotiations over European sovereign debt because of fears that the debt crisis could spread to other countries in Europe or elsewhere. That could trigger a prolonged economic slump that would weigh heavily on crude oil demand.

Positive developments in Europe over the last month played a large role in the recent crude market rally. Even after Friday's decline.....Read Dan's entire post at Rigzone.

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