Lingering concerns about the euro zone debt crisis dampened demand for oil futures, pushing both the West Texas Intermediate (WTI) benchmark in the US and Brent crude down by more than US$1 per barrel.
Early today, the markets cheered the results of Sunday’s elections in Greece, which saw the centrist New Democracy party secure a narrow victory of the anti-austerity Coalition of the Radical Left.
However, the rally did not last as fears that Greece could still have to pull out of the euro zone prompted investors to sell riskier assets following the initial surge.
Greece and Germany at currently at odds over whether the debt laden country’s bailout deal can be renegotiated.
Leader of New Democracy Antonis Samaras, who has already started coalition talks, said he would seek to negotiate with the EU to amend the terms of the bailout agreement. However, the euro zone’s largest economy Germany said Greece’s commitments under the deal were not re-negotiable.
Losses in oil futures were curbed by comments from spokesman for Europe’s foreign policy chief Catherine Ashton Michael Mann, who said the ban on insuring tankers carrying Iranian crude will take effect on July 1.
Iran and six world powers including the five permanent members of the UN Security Council and Germany kicked off another round of negotiations in Moscow today.
Iran is still unwilling to make concessions over its uranium enrichment programme, which is allegedly aimed at developing a nuclear weapon.
The Middle Eastern country has been subjected to a series of sanctions by the US and the EU, which have resulted in a significant decline in its oil exports.
US light, sweet crude for US light, sweet crude for July delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), slumped US$1.16 to US$82.87/barrel in morning trade in New York.
August Brent crude declined US$1.32 to US$96.29/barrel on the ICE Exchange this afternoon.
Today’s top risers in the sector were:
Bahamas Petroleum (LON:BPC), up 10.5 percent at 8.51 pence at midday
JKX Oil & Gas (LON:JKX), up 8.5 percent at 108.75 pence
Sirius Petroleum (LON:SRSP), up 8 percent at 3.38 pence
IGas Energy (LON:IGAS), up 4.5 percent at 66 pence
Sound Oil (LON:SOU), up 3.5 percent at 1.01 pence
Amerisur Resources (LON:AMER), up 3 percent at 27 pence
The top fallers were:
San Leon Energy (LON:SLE), down 9.5 percent at 7.37 pence at midday
Silvermere Energy (LON:SLME), down 6.5 percent at 11.44 pence
Urals Energy (LON:UEN), down 6 percent at 5.5 pence
3Legs Resources (LON:3LEG), down 5.5 percent at 38.1 pence