Crude Gives Back Week's Gains
Crude futures slumped Friday, retreating from gains posted earlier in the week, on a weaker euro and hope for easing tensions between Iran and the West.
Light, sweet crude for February delivery recently settled $1.93, lower at $98.46 a barrel on the New York Mercantile Exchange. The February contract expired at settlement, and the more heavily traded March contract settled $2.21, or 2.2%, lower at $98.33 a barrel.
Brent crude on the ICE futures exchange traded $1.57 lower at $109.85 a barrel.
After holding just above $100 a barrel Thursday, prices fell as oil traders parsed what could be an initial agreement in talks between Greece and private investors to reduce the struggling nation's debt burden. The euro weakened against the dollar, giving back some of the week's strong gains, which typically weighs down oil prices as it makes dollar-denominated crude more expensive for buyers using other currencies.
While a preliminary deal could be announced as early as Friday, according to a Greek official, oil investors remain concerned that the talks won't mend the many cracks in Europe's economic situation, depressing oil demand in the region.
"There are still a lot of questions about what will happen with Greece, what will happen in Europe, so there is a little bit of concern," said Phil Flynn, an analyst with PFG Best in Chicago.
Europe continues to stay on the front burner for many oil traders concerned that the continent's debt troubles will put pressure on the global economy, and with it, oil demand. On Friday, optimism that Iran may try to lower tensions with major oil consuming countries also helped push prices below the $100 level.
European Union diplomats scheduled to meet Monday are expected to approve Europe's toughest measures yet to isolate Iran economically due to its nuclear program. But in recent days, Iran has said it was ready to return to negotiations over its nuclear program, according to news reports from Turkey.
"There's no way that the market can't take the idea of Iranian talks as a bit of an olive branch," said Peter Donovan, vice president and trader at Vantage Trading in New York. Any softening of Iran's stance will pull crude lower, he said.
Front-month February reformulated gasoline blendstock, or RBOB, settled 3.14 cents lower at $2.7844 a gallon. February heating oil settled 4.76 cents lower at $2.9884 a gallon.
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