Oil fell as a stalemate between European policy makers and Greek bondholders over how to provide the country with greater debt relief bolstered concern that the euro-zone debt crisis may spread.
Futures dropped as much as 1.3 percent after European finance ministers balked at putting up more public money for Greece, calling on bondholders to provide greater relief. Crude prices climbed earlier as Iran criticized a European embargo on its crude exports without repeating threats to disrupt shipping in the Persian Gulf.
“The problems with Greece and the bondholders have yet to be resolved, which continues to be a major worry,” said Chris Dillman, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The euro-zone concerns are sending equities lower and the dollar is stronger, which is putting downward pressure on oil.”
Crude oil for March delivery fell 97 cents, or 1 percent, to $98.61 a barrel at 9:34 a.m. on the New York Mercantile Exchange. The contract slipped as much as $1.32 to $98.26. Prices are up 12 percent from a year earlier.
Brent oil for March settlement dropped 68 cents, or 0.6 percent, to $109.90 a barrel on the London-based ICE Futures Europe exchange.
The Standard & Poor’s 500 Index declined 0.6 percent and the Dow Jones Industrial Average fell 0.5 percent.
The euro slipped as much as 0.5 percent to $1.2954. A weaker common currency and stronger dollar decrease the appeal of commodities to investors.
