“West Texas Intermediate crude fell from the highest price in three weeks as an unprecedented levy on bank savings in Cyprus threatened to worsen Europe’s debt crisis. Libya shut an oil pipeline after protests.
Futures slipped as much as 1.4 percent in New York, dropping for the first time in three days. Cyprus bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.6 billion) by taking a piece of every bank account, sending the euro tumbling and sparking public outrage. The closing of the Waha Oil Co. pipe after a strike by truck drivers cut Libyan crude output by 120,000 barrels a day, according to Oil Minister Abdulbari al-Arusi.
“Confidence is rattled,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen said by phone. “We have to figure out where this Cyprus debacle leaves us. Until we know for sure what’s happening, it’ll probably keep the market on the defensive for a few days.”
WTI for April delivery declined as much as $1.31 to $92.14 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.25 at 10:40 a.m. London time. The contract climbed 42 cents to $93.45 on March 15, the highest settlement since Feb. 20. The volume of all futures traded was 75 percent more than the 100-day average.
Euro Weakness
Brent for May settlement dropped $1.76 to $108.06 a barrel on the London-based ICE Futures Europe exchange. The number of futures traded was 5 percent below the 100-day average. The European benchmark grade was at a premium of $15.43 to WTI for the same month. That’s down from $16 on March 15 and is the lowest since Jan. 17.
The euro fell as low as $1.2882, the weakest since December. A declining euro and stronger dollar typically decrease the appeal of investing in dollar-priced commodities such as oil…..”
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