Oil traded near its lowest level in four days, erasing earlier gains as German and French leaders met in an attempt to revive growth in the euro region.
West Texas Intermediate futures in New York fell as much as 0.7 percent as German Chancellor Angela Merkel and French President Nicolas Sarkozy met to tighten budget rules for European governments. Oil earlier rose as much as 0.6 percent after the U.S. Joint Chiefs of Staff Chairman General Martin Dempsey said Iran is able block the Strait of Hormuz for a period of time. Nigerian oil production was threatened by pipeline thefts and oil worker strike.
“While geopolitical issues in relation to Iran provide oil price support, conversely perceptions relating to the euro zone are currently biased towards the risk of slower economic activity that would result from any perceived impasse in the conversations that Sarkozy and Merkel will have today,” said Gareth Lewis-Davies, senior energy strategist at BNP Paribas in London. “The prospect of weaker economic activity feeds into the risk of lower oil demand and hence oil prices.”
Crude for February delivery fell as much as 73 cents to $100.83 a barrel, the lowest price since Jan. 3, on the New York Mercantile Exchange, after rising to $102.15 earlier today. It was at $101.53 at 1:36 p.m. London time.
Brent oil for February settlement was at $113.04 a barrel, down 2 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York crude was at $11.51, the highest gap based on closing prices in almost two months.
