Crude erases losses stemming from European woes, U.S. earnings
Published Oct 23, 2012 08:33PM ET
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD86.83 a barrel on Wednesday, up 0.18%, off from a session high of USD86.88 and up from an earlier session low of USD86.70.
Investors sold the growth-sensitive commodity after Moody's slapped credit-rating downgrades on the Spanish regions of Andalucia, Extremadura, Castilla-La Mancha, Catalonia and Murcia.
The news added to already growing uncertainty as to whether or not Spain will request a bailout.
Requesting financial assistance would allow Spain to tap the European Central Bank's bond-buying program, which would lower yields in Spanish government debt auctions and ease credit conditions in the country, which would be bullish for oil.
Furthermore, the Bank of Spain said the country’s gross domestic product contracted by 0.4% in the third quarter, leaving country cemented in recession.
The Spanish monetary authority also stressed that it could not rule out missing deficit targets later this year.
Meanwhile in the U.S., weak third-quarter earnings sent investors chasing the safe-haven greenback, sending investors ditching oil on fears of a cooling global economy before bargain hunting kicked in.
Ongoing tension in the Middle East gave investors reason to buy.
Iran reportedly said earlier it would halt exports if the West intensified sanctions slapped on the country for its nuclear ambitions.
On the ICE Futures Exchange, Brent oil futures for December delivery were up 0.34% and trading at USD108.36 a barrel, up USD21.53 from its U.S. counterpart.
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Written By: Investing.com
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