Investing.com – Crude oil futures fell sharply on Friday, trimming a weekly gain as growing fears over the euro zone’s sovereign debt crisis coupled with a broadly stronger U.S. dollar undermined the appeal of commodities.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD87.07 a barrel by close of trade on Friday, edging 0.67% higher over the week.
Crude prices tumbled 2.2% on Friday as concerns over a Greek debt default intensified after Bloomberg News reported that Germany’s Finance Ministry was studying the impact of a possible Greek default, including a scenario in which the debt-laden country exited the euro zone.
Adding to investors’ nervousness over the region’s debt crisis, European Central Bank Governing Council member Juergen Stark announced his resignation, sparking speculation that it was due to a disagreement over the ECB’s bond-buying program.
The news sent the euro plunging to a six-month low against the U.S. dollar and sparked heavy losses in European and U.S. equity markets.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied 1.77% on Friday to settle at 77.72, the highest since February 23.
Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
On Thursday, crude prices came under pressure after Federal Reserve Chairman Ben Bernanke reiterated that the central bank had a range of policy tools to stimulate the U.S. economy, but stopped short of providing further details.
Meanwhile, speculation that many of the measures outlined in President Barack Obama’s proposed USD447 billion stimulus plan on Thursday would not gain approval of U.S. lawmakers weighed.
Crude prices rallied nearly 3.9% on Wednesday to hit USD90.39 a barrel, the highest since August 4 as concerns over a disruption to supplies in the Gulf of Mexico and a weaker U.S. dollar boosted prices.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery traded at USD110.63 a barrel by close of trade on Friday.
The Brent contract fell 1.68% over the week, with the spread between the Brent and the crude contracts narrowing to USD23.56 a barrel, down from a record high settlement of USD26.87 on September 6.
Brent prices came under pressure after Libya’s interim oil and finance minister Ali Tarhouni said on Friday that oil production will resume in “three to four days” and that the country was set to reach full pre-war output levels within a year.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD87.07 a barrel by close of trade on Friday, edging 0.67% higher over the week.
Crude prices tumbled 2.2% on Friday as concerns over a Greek debt default intensified after Bloomberg News reported that Germany’s Finance Ministry was studying the impact of a possible Greek default, including a scenario in which the debt-laden country exited the euro zone.
Adding to investors’ nervousness over the region’s debt crisis, European Central Bank Governing Council member Juergen Stark announced his resignation, sparking speculation that it was due to a disagreement over the ECB’s bond-buying program.
The news sent the euro plunging to a six-month low against the U.S. dollar and sparked heavy losses in European and U.S. equity markets.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied 1.77% on Friday to settle at 77.72, the highest since February 23.
Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
On Thursday, crude prices came under pressure after Federal Reserve Chairman Ben Bernanke reiterated that the central bank had a range of policy tools to stimulate the U.S. economy, but stopped short of providing further details.
Meanwhile, speculation that many of the measures outlined in President Barack Obama’s proposed USD447 billion stimulus plan on Thursday would not gain approval of U.S. lawmakers weighed.
Crude prices rallied nearly 3.9% on Wednesday to hit USD90.39 a barrel, the highest since August 4 as concerns over a disruption to supplies in the Gulf of Mexico and a weaker U.S. dollar boosted prices.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery traded at USD110.63 a barrel by close of trade on Friday.
The Brent contract fell 1.68% over the week, with the spread between the Brent and the crude contracts narrowing to USD23.56 a barrel, down from a record high settlement of USD26.87 on September 6.
Brent prices came under pressure after Libya’s interim oil and finance minister Ali Tarhouni said on Friday that oil production will resume in “three to four days” and that the country was set to reach full pre-war output levels within a year.