Investing.com - Crude oil futures traded higher during the U.S. afternoon session Monday, after weekend turmoil in Syria and stalled talks between Iran and the West raised concerns over a disruption to supplies from the region.
However, gains were limited amid growing fears over the fiscal health of Spain as investors continued to monitor political developments in Greece.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD91.14 a barrel during U.S. morning trade, gaining 0.31%.
It earlier rose by as much as 1.2% to trade at USD91.99 a barrel, the highest since May 22.
Market sentiment firmed after weekend opinion polls in Greece indicated that pro-bailout party New Democracy was leading the polls ahead of a general election next month.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The euro inched up from last week’s 22-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.3% to trade at 82.30.
On Friday, the index hit the highest level since September 2010.
Despite the day’s gains, oil futures remained vulnerable to further losses amid growing concerns over the fiscal health of Spain.
Ratings agency Standard & Poor’s cut the ratings on five Spanish banks on Friday and said it believes the country is entering a double-dip recession.
Adding to the gloomy environment, the president of Catalonia, Spain's wealthiest autonomous region, said on Friday it had few options to refinance over EUR13 billion in debt due this year.
Furthermore, a government source said on Sunday that Spain may recapitalize its fourth-largest bank, Bankia, which last week asked for EUR19 billion in funding.
The fears pushed up yields on Spanish 10-year government bonds to above 6.5%, the highest level since November of last year, up from 6.34% on Friday.
There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil. The euro zone accounted for nearly 12% of global oil consumption in 2010, according to data from British Petroleum.
Meanwhile, oil traders focused on ongoing violence in Syria, after an alleged government attack on the town of Houla killed at least 109 people over the weekend, according to reports.
The United Nations Security Council met on Sunday to discuss unfolding developments that brought a six week cease-fire to an end.
A lack of resolution in talks between Iran and world powers over Tehran’s nuclear program late last week provided further support.
A dispute between Iran and the West intensified over the weekend, after Tehran refused to permit the International Atomic Energy Agency from visiting a nuclear site which is suspected of being used to develop nuclear weapons.
The stand-off between Iran and Western countries dominated sentiment in the oil market for the most part of the fourth quarter of last year as well as the first three months of 2012.
But NYMEX crude prices are off almost 14% in May and have fallen nearly 17.5% since hitting a March 1 intraday peak of USD110.53 a barrel, as concerns lingered over a widening global economic slowdown and as tensions have eased between Iran and Western nations over the country’s nuclear program.
Trading is expected to be subdued on Monday amid a lack of key economic data and a U.S. market holiday for Memorial Day. Floor trading on the NYMEX will remain closed.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery rose 0.8% to trade at 107.66 a barrel, with the spread between the Brent and crude contracts standing at USD16.25.
However, gains were limited amid growing fears over the fiscal health of Spain as investors continued to monitor political developments in Greece.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD91.14 a barrel during U.S. morning trade, gaining 0.31%.
It earlier rose by as much as 1.2% to trade at USD91.99 a barrel, the highest since May 22.
Market sentiment firmed after weekend opinion polls in Greece indicated that pro-bailout party New Democracy was leading the polls ahead of a general election next month.
The likelihood of Greece leaving the euro has been growing since early May, when anti-bailout political parties deprived pro-austerity parties of a majority at the polls.
The euro inched up from last week’s 22-month low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.3% to trade at 82.30.
On Friday, the index hit the highest level since September 2010.
Despite the day’s gains, oil futures remained vulnerable to further losses amid growing concerns over the fiscal health of Spain.
Ratings agency Standard & Poor’s cut the ratings on five Spanish banks on Friday and said it believes the country is entering a double-dip recession.
Adding to the gloomy environment, the president of Catalonia, Spain's wealthiest autonomous region, said on Friday it had few options to refinance over EUR13 billion in debt due this year.
Furthermore, a government source said on Sunday that Spain may recapitalize its fourth-largest bank, Bankia, which last week asked for EUR19 billion in funding.
The fears pushed up yields on Spanish 10-year government bonds to above 6.5%, the highest level since November of last year, up from 6.34% on Friday.
There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil. The euro zone accounted for nearly 12% of global oil consumption in 2010, according to data from British Petroleum.
Meanwhile, oil traders focused on ongoing violence in Syria, after an alleged government attack on the town of Houla killed at least 109 people over the weekend, according to reports.
The United Nations Security Council met on Sunday to discuss unfolding developments that brought a six week cease-fire to an end.
A lack of resolution in talks between Iran and world powers over Tehran’s nuclear program late last week provided further support.
A dispute between Iran and the West intensified over the weekend, after Tehran refused to permit the International Atomic Energy Agency from visiting a nuclear site which is suspected of being used to develop nuclear weapons.
The stand-off between Iran and Western countries dominated sentiment in the oil market for the most part of the fourth quarter of last year as well as the first three months of 2012.
But NYMEX crude prices are off almost 14% in May and have fallen nearly 17.5% since hitting a March 1 intraday peak of USD110.53 a barrel, as concerns lingered over a widening global economic slowdown and as tensions have eased between Iran and Western nations over the country’s nuclear program.
Trading is expected to be subdued on Monday amid a lack of key economic data and a U.S. market holiday for Memorial Day. Floor trading on the NYMEX will remain closed.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery rose 0.8% to trade at 107.66 a barrel, with the spread between the Brent and crude contracts standing at USD16.25.