Crude-oil futures finished slightly higher Tuesday, but traders were hesitant to push prices too far in either direction ahead of a key European Union summit later this week.
Light, sweet crude for January delivery settled up 29 cents, or 0.3%, to $101.28 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled up $1, or 0.9%, to $110.81 a barrel.
Crude futures stuck to a tight range ahead of the summit, scheduled for Thursday and Friday, where EU leaders are set to discuss ways for the euro zone to bolster fiscal discipline as they seek to save the single currency area from collapse.
"Everybody's waiting on what's going to go on in Europe," said Mark Waggoner, president of the commodities brokerage Excel Futures. "The bottom line is they can't get it together over there."
Focus on the upcoming summit has intensified after Standard & Poor's on Monday placed 15 euro-zone nations on review for credit downgrades due to the deepening political and economic crisis.
Developments out of the euro zone have dominated trading in the oil market for the last several months, amid worries the currency zone's sovereign-debt crisis could trigger a broader economic slowdown that would curb demand for crude-oil.
Euro-zone headlines have been rocking the equities and currency markets with even greater intensity. The two markets in turn often influence trading in oil.
Nymex crude futures have climbed out of lows under $80 a barrel since early October, while Brent has surfaced from below $100 a barrel, largely on optimism that Europe will find a way to save the single currency zone from collapse.
Monday's warning from S&P, and the market's subsequent pull-back, underscores the extent of the market's focus on Europe.
Separately, the prospect of additional sanctions on Iran's energy industry continues to keep a floor under prices. The EU's energy commissioner, Gunther Oettinger, said Tuesday that the bloc believes that a ban on Iranian oil imports should be pursued.
"There's a lot of push and pull in the market," said Jason Schenker, president of Prestige Economics, adding that traders are trying to digest a number of "conflicting and competing" forces.
Front-month January reformulated gasoline blendstock, or RBOB, settled up 3.17 cents, or 1.2%, to $2.6454 a gallon. January heating oil settled up 2.93 cents, or 0.1%, to $3.0217 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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