West Texas Intermediate (WTI) light sweet crude oil for February delivery was lower by 88 cents to $100.68 a barrel, while the March benchmark European Brent crude contract was behind by 57 cents to $112.24 a barrel, even as the U.S. dollar ticked lower against a basket of six major currencies. Typically, oil prices and the dollar have an inverse correlation.
Investors received bearish news out of Europe after German Chancellor Angela Merkel and French President Nicolas Sarkozy's meeting in Berlin to discuss plans for fighting the eurozone debt crisis. Following the meeting, Merkel announced that Greece's ability to receive its next round of urgently-needed bailout cash will be contingent on how quickly the country and its private creditors can come to an agreement on restructuring the national debt -- once again highlighting the formidable challenges that remain to overcoming the European debt crisis. An October meeting of eurozone leaders said that a second bailout for Greece would be partly based on private creditors taking a formidable 50% write-down on the value of their Greek debt holdings.
Investor confidence was also being hurt by evidence of a cooling German economy, the most important eurozone economy. German industrial output fell 0.6% in November, according to the Economy Ministry in Berlin, which was a slightly larger-than-expected decline, according to a Reuters poll of economists. In comparison, output rose 0.8% in October."I think right now oil is trading lower on perceived risks of slower economic activity," said Kingsview Financial trader Matt Zeman. A winding down of U.S. refinery operations put additional pressure on WTI prices Monday by reducing domestic demand for crude oil. "We're seeing a significant amount of planned and unplanned refinery maintenance taking place in the Gulf Coast region," said Schork Report energy analyst Hamza Khan. Energy stocks were trading mixed. Hess (HES - Get Report) was adding 1% to $57; ExxonMobil (XOM - Get Report) was rising 0.3% to $85.38; Chevron (CVX - Get Report) was up 0.9% to $109.24; Marathon Oil (MRO - Get Report) was falling 0.7% to $30.47; Triangle Petroleum (TPLM - Get Report) was gaining 1.7% to $7.26; BP (BP - Get Report) was down 0.2% to $43.99; Suncor (SU - Get Report) was up 0.2% to $30.78. -- Written by Andrea Tse in New York.
>To contact the writer of this article, click here: Andrea Tse.