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Crude oil futures drop as Slovakia EFSF vote in focus

Published 10/11/2011, 05:26 AM
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Investing.com – Crude oil futures were down for the first time in six days on Tuesday, pulling back from a two-week high as the U.S. dollar strengthened ahead of a closely-watched vote by Slovakia on expanding the powers of the euro zone’s bailout fund later in the day.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at USD84.56 a barrel during European morning trade, slumping 0.99%.    

It earlier fell by as much as 1.4% to trade at a daily low of USD84.28 a barrel.

Investors remained cautious ahead of a vote by Slovakia on expanding the powers of the euro zone's EUR440 billion bailout fund, the European Financial Stability Facility.

The country is the last of the 17-member bloc yet to vote on the EFSF, which needs to be approved by all euro zone states for it to go active.

The Freedom and Solidarity Party, led by Parliamentary Speaker Richard Sulik, previously said his party will not support boosting the EFSF if its conditions are not accepted by coalition partners.

The U.S. dollar was higher against most of its major counterparts, as risk appetite weakened ahead of the closely-watched vote.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.33% to trade at 78.13.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

Meanwhile, some profit-taking emerged following Monday’s 3% gain that took prices to USD86.07 a barrel, the highest since September 21.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery fell 1.01% to trade at USD105.57 a barrel, up USD21.01 a barrel on its U.S. counterpart.

Losses in Brent were limited after a strike by Kuwaiti customs union shut ports and halted all vessel traffic from one of the world’s top five oil exporters.

OPEC member Kuwait produces approximately 2.4 million barrels of oil per day, accounting for nearly 7.7% of OPEC’s overall crude output in 2010.


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