Oil extended last week’s decline as Moody’s Investors Service said it will review the credit ratings of all European Union countries and China’s export growth slowed to the weakest pace since 2009.
Crude dropped as much as 1.9 percent after Moody’s said last week’s EU summit failed to deliver “decisive policy measures” to end the debt crisis. China’s exports rose 13.8 percent in November from a year earlier, compared with 15.9 percent in October, the customs bureau said Dec. 10.
“The Moody’s announcement really affects market sentiment,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “There is a pretty good chance that the global oil demand will be pretty weak next year because of the European crisis and China.”
Crude for January delivery fell $1.34, or 1.3 percent, to $98.07 a barrel at 11 a.m. on the New York Mercantile Exchange. Prices dropped 1.5 percent last week and are up 7.3 percent this year.
Brent oil for January settlement lost $1.01, or 0.9 percent, to $107.61 a barrel on the London-based ICE Futures Europe exchange.
Moody’s announcement came after Standard & Poor’s said last week that it may strip Germany and France of their AAA credit ratings and put all 17 nations that use the euro on review for possible downgrade.
The 27 member states of the European Union accounted for 16 percent of global oil demand last year, based on BP Plc’s annual Statistical Review of World Energy.
