Investing.com - Crude oil futures extended overnight losses during U.S. morning hours on Monday, falling to the lowest level of the day as political uncertainty in Spain and Italy dampened appetite for riskier assets.
On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD96.21 a barrel during U.S. morning trade, down 1.6% on the day.
New York-traded oil prices fell by as much as 1.8% earlier in the session to hit a daily low of USD96.10 a barrel, the weakest level since January 28.
Oil’s losses coincided with the euro falling to the lowest levels of the session as an escalating political crisis in Spain pushed the country’s borrowing costs higher.
Spanish Prime Minister Mariano Rajoy faced calls to resign from the country’s opposition leader, following allegations that he and senior officials in the ruling Popular Party received secret payments.
The yield on Spanish 10-year bonds rose to 5.43% on Monday from 5.21% on Friday, as investor concerns over the deepening political crisis mounted.
Similar-maturity Italian yields inched up to 4.46% amid uncertainty over the outcome of upcoming elections as former Prime Minister Silvio Berlusconi gained ground in opinion polls.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks, and flock to traditional safe haven assets like U.S. Treasuries and the dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.3% to trade at 79.45.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Oil futures came under additional pressure after Iran’s Foreign Minister Ali Akbar Salehi said Sunday that Tehran would be interested in participating in bilateral talks on its nuclear program, so long as there is “honest intention.”
The minister’s reply came in response to a renewed offer by the U.S. for talks, which have been led by the five permanent members of the United Nations Security Council.
The next round of discussions would take place in Kazakhstan on February 25, Salehi said.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery declined 0.9% to trade at USD115.75 a barrel, with the spread between the Brent and crude contracts standing at USD19.54 a barrel.
The spread between the two contracts widened to the highest level since January 3 amid renewed concerns over the glut of oil supply in storage at Cushing, Oklahoma, the trading hub for NYMEX oil.
Operators of the Seaway Pipeline said late last week that restrictions will limit flows on the key pipeline until the fourth quarter of 2013.
The pipeline began carrying crude to the Gulf Coast area from Cushing, last month after the flow direction was reversed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD96.21 a barrel during U.S. morning trade, down 1.6% on the day.
New York-traded oil prices fell by as much as 1.8% earlier in the session to hit a daily low of USD96.10 a barrel, the weakest level since January 28.
Oil’s losses coincided with the euro falling to the lowest levels of the session as an escalating political crisis in Spain pushed the country’s borrowing costs higher.
Spanish Prime Minister Mariano Rajoy faced calls to resign from the country’s opposition leader, following allegations that he and senior officials in the ruling Popular Party received secret payments.
The yield on Spanish 10-year bonds rose to 5.43% on Monday from 5.21% on Friday, as investor concerns over the deepening political crisis mounted.
Similar-maturity Italian yields inched up to 4.46% amid uncertainty over the outcome of upcoming elections as former Prime Minister Silvio Berlusconi gained ground in opinion polls.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks, and flock to traditional safe haven assets like U.S. Treasuries and the dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.3% to trade at 79.45.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Oil futures came under additional pressure after Iran’s Foreign Minister Ali Akbar Salehi said Sunday that Tehran would be interested in participating in bilateral talks on its nuclear program, so long as there is “honest intention.”
The minister’s reply came in response to a renewed offer by the U.S. for talks, which have been led by the five permanent members of the United Nations Security Council.
The next round of discussions would take place in Kazakhstan on February 25, Salehi said.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery declined 0.9% to trade at USD115.75 a barrel, with the spread between the Brent and crude contracts standing at USD19.54 a barrel.
The spread between the two contracts widened to the highest level since January 3 amid renewed concerns over the glut of oil supply in storage at Cushing, Oklahoma, the trading hub for NYMEX oil.
Operators of the Seaway Pipeline said late last week that restrictions will limit flows on the key pipeline until the fourth quarter of 2013.
The pipeline began carrying crude to the Gulf Coast area from Cushing, last month after the flow direction was reversed.