Investing.com - Crude oil futures were lower during European morning trade on Tuesday, easing off the previous session’s one-month high as appetite for riskier assets weakened after Moody’s cut France’s credit rating.
Losses were limited as escalating violence between Israel and Hamas militants in Gaza underlined concerns about a wider conflict that could disrupt supplies from the region.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD88.66 a barrel during European morning trade, down 0.7% on the day.
New York-traded oil prices fell by as much as 0.8% earlier in the day to hit a session low of USD88.55 a barrel. NYMEX oil futures surged nearly 3% on Monday to touch USD89.79 a barrel, the strongest level since October 22.
Ratings agency Moody’s downgraded France’s AAA-rating by one notch to AA1 late Monday and kept a negative outlook on the rating, citing weakening growth prospects for the euro zone’s second-largest economy.
The downgrade followed a similar move by Standard & Poor’s several months ago, leaving Fitch Ratings as the only ratings firm to keep France at triple-A.
Investors now looked ahead to of a meeting of euro zone finance ministers later in the day in Brussels to discuss whether Greece can receive its next installment of bailout funds.
Oil prices remained supported as the conflict between the Israelis and Palestinians continued for a sixth day, with both sides stepping up attacks in and around the Gaza Strip.
Oil traders were concerned that neighboring Muslim countries, specifically Iran, could be drawn into the conflict, which could impact oil exports from the region.
Countries in the Middle East and North Africa were responsible for 36% of global oil production and held 52% of proved reserves in 2011.
Meanwhile, investors continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Sentiment was bolstered on Monday after U.S. Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the seven weeks left before the January 1 deadline.
Market participants 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 crude stockpiles rose by 1.0 million barrels last week.
U.S. crude stockpiles totaled 375.9 million barrels last week, the highest since July 20. The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery shed 0.7% to trade at USD110.92 a barrel, with the spread between the Brent and crude contracts standing at USD22.26 a barrel.
Losses were limited as escalating violence between Israel and Hamas militants in Gaza underlined concerns about a wider conflict that could disrupt supplies from the region.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD88.66 a barrel during European morning trade, down 0.7% on the day.
New York-traded oil prices fell by as much as 0.8% earlier in the day to hit a session low of USD88.55 a barrel. NYMEX oil futures surged nearly 3% on Monday to touch USD89.79 a barrel, the strongest level since October 22.
Ratings agency Moody’s downgraded France’s AAA-rating by one notch to AA1 late Monday and kept a negative outlook on the rating, citing weakening growth prospects for the euro zone’s second-largest economy.
The downgrade followed a similar move by Standard & Poor’s several months ago, leaving Fitch Ratings as the only ratings firm to keep France at triple-A.
Investors now looked ahead to of a meeting of euro zone finance ministers later in the day in Brussels to discuss whether Greece can receive its next installment of bailout funds.
Oil prices remained supported as the conflict between the Israelis and Palestinians continued for a sixth day, with both sides stepping up attacks in and around the Gaza Strip.
Oil traders were concerned that neighboring Muslim countries, specifically Iran, could be drawn into the conflict, which could impact oil exports from the region.
Countries in the Middle East and North Africa were responsible for 36% of global oil production and held 52% of proved reserves in 2011.
Meanwhile, investors continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Sentiment was bolstered on Monday after U.S. Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the seven weeks left before the January 1 deadline.
Market participants 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 crude stockpiles rose by 1.0 million barrels last week.
U.S. crude stockpiles totaled 375.9 million barrels last week, the highest since July 20. The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery shed 0.7% to trade at USD110.92 a barrel, with the spread between the Brent and crude contracts standing at USD22.26 a barrel.