Investing.com – Crude oil futures erased gains on Tuesday, retreating from a two-day high as a broadly stronger U.S. dollar reduced the appeal of commodities, while lingering fears over the euro zone’s debt crisis also weighed.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD87.97 a barrel during European morning trade, shedding 0.26%.
It earlier fell as much as 0.41% to trade at a daily low of USD87.83 a barrel.
Ongoing fears over a potential Greek debt default and concerns that ratings agency Moody's will downgrade the credit ratings of France’s three largest banks saw the euro trade lower against the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.44% to trade at 78.20. Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
Crude prices rose to a two-day high of USD89.22 a barrel earlier amid reports that Italy's Finance Ministry held talks with Chinese officials about “significant” purchases of Italian bonds and investments in local companies.
Despite the news, Italian bond yields crept higher ahead of a closely-watched Italian bond auction later in the day.
Markets were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show stockpiles fell by 3.0 million barrels last week, while gasoline stockpiles were projected to drop by 0.5 million barrels.
Global financial service provider Societe Generale lowered its oil price forecast for the fourth quarter of 2011 to USD73.30 a barrel, due to weaker global economic growth.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery fell 0.56% to trade at USD110.06 a barrel, up USD22.08 a barrel on its U.S. counterpart.
SocGen forecast Brent prices to average USD98.30 a barrel in the fourth quarter of 2011, as Libyan oil supplies return to the market.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD87.97 a barrel during European morning trade, shedding 0.26%.
It earlier fell as much as 0.41% to trade at a daily low of USD87.83 a barrel.
Ongoing fears over a potential Greek debt default and concerns that ratings agency Moody's will downgrade the credit ratings of France’s three largest banks saw the euro trade lower against the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.44% to trade at 78.20. Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
Crude prices rose to a two-day high of USD89.22 a barrel earlier amid reports that Italy's Finance Ministry held talks with Chinese officials about “significant” purchases of Italian bonds and investments in local companies.
Despite the news, Italian bond yields crept higher ahead of a closely-watched Italian bond auction later in the day.
Markets were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show stockpiles fell by 3.0 million barrels last week, while gasoline stockpiles were projected to drop by 0.5 million barrels.
Global financial service provider Societe Generale lowered its oil price forecast for the fourth quarter of 2011 to USD73.30 a barrel, due to weaker global economic growth.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery fell 0.56% to trade at USD110.06 a barrel, up USD22.08 a barrel on its U.S. counterpart.
SocGen forecast Brent prices to average USD98.30 a barrel in the fourth quarter of 2011, as Libyan oil supplies return to the market.