Oil Futures Drop amid Uncertainty about Greek Bailout
Source: MarketWatch, Polya Lesova & Nick Godt (2/11/10)
"The euro slumped and the dollar jumped amid continued uncertainty."
Crude oil for March delivery recent fell 15 cents, or 0.2%, to $74.37 a barrel in electronic trade.
It earlier rose to a high of $75.45 a barrel, receiving a lift from the International Energy Agency (IEA) lifting its forecast for global oil demand this year.
European leaders said they've reached an agreement to support Greece's economy but investors remained anxious about the details of the plan.
The euro slumped and the dollar jumped amid continued uncertainty. Stocks on Wall Street also traded mostly lower.
Oil prices finished with gains during the past three sessions.
Crude had received an early lift from the latest forecast from the IEA. The group said it expects global oil demand this year to be 170,000 barrels per day (bpd) higher than previously expected.
Demand is estimated at 86.5 million bpd, representing an increase of 1.6 million bpd compared with 2009 levels, the IEA said in its monthly report. This growth will come entirely from emerging, non-OECD economies.
"More robust economic projections by the IMF, notably for 2010, are partly counterbalanced by a higher price assumption and persistently weak preliminary OECD oil-demand data," the IEA said. The IMF is projecting global GDP growth of 3.8% this year.
The agency warned, however, that if global economic growth doesn't meet expectations, oil demand could be around 400,000 bpd lower.
"The IEA continues to be the most optimistic among all large institutions," said analysts at Commerzbank AG in a note to clients.
"This should initially support the oil price, especially as the data on U.S. inventories, which may weigh on the oil price, will only be released tomorrow," they said.