Oil fell from its highest settlement in almost eight months on signs that Europe’s debt crisis may drag the region into a recession, curbing fuel consumption.
West Texas Intermediate crude futures reversed gains as the euro dropped from near a one-week high against the dollar after European reports showed services and manufacturing output contracted and inflation slowed. German 10-year bonds stayed lower after the country sold additional securities. Oil rallied 4.2 percent yesterday as the head of Iran’s army warned the U.S. against sending an aircraft carrier back to the Persian Gulf.
Crude for February delivery was at $102.21 a barrel in electronic trading on the New York Mercantile Exchange, down 75 cents, at 11:37 a.m. London time. Yesterday, the contract rose $4.13 to $102.96 a barrel, the highest settlement since May 10. Prices climbed 8.2 percent in 2011, their third annual gain.
Brent oil for February settlement on the London-based ICE Futures Europe exchange was at $111.56 a barrel, 57 cents lower, after advancing 4.4 percent yesterday. The European benchmark contract was at a $9.30 premium to New York-traded West Texas Intermediate grade. The spread was a record $27.88 on Oct. 14.