Investing.com – Crude oil futures rebounded from a two-week low on Friday to end the week modestly higher in a choppy, holiday-shortened session as fears over a disruption to supplies from the Middle East overshadowed concerns over the deepening debt crisis in the euro zone.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD97.36 a barrel by close of trade on Friday, edging 0.21% higher over the week.
Low trading volumes contributed to oil's price volatility on Friday, with many traders still out after Thursday's U.S. Thanksgiving holiday.
Prices fell by as much as 1.8% earlier in the day to trade at USD94.98 a barrel, the lowest since November 9 after Italian 10-year bond yields spiked above 7%, even as the European Central Bank bought bonds in the secondary market.
The rise in Italian borrowing costs came after a disappointing auction of Italian government debt, adding to fears that the debt crisis in the region is deepening.
The auction came two days after Germany, the euro zone’s largest economy, missed its EUR6 billion sales target at an auction of 10-year bonds, in its least successful debt sale since the launch of the single currency.
Also Friday, ratings agency Standard & Poor's downgraded Belgium's credit rating by one notch, with a negative outlook, citing renewed funding and market risk pressure.
However, the sharp price decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid growing geopolitical tensions over Iran's nuclear program and Middle East unrest.
A spokesman for the French Foreign Ministry said Friday that France wants "unprecedented" sanctions on Iran, including a possible ban on oil imports from the country, and is in talks with fellow European Union members ahead of a December 1 summit of EU foreign ministers in Brussels.
Meanwhile, in Saudi Arabia, four people were killed and nine people were injured Friday in clashes between Shiite protestors and Saudi security forces in the oil-rich Eastern Province.
Saudi Arabia is the world’s largest oil producer and biggest exporter among OPEC members, while Iran is the world’s fourth largest oil producer and the second biggest exporter among OPEC members.
Crude prices came under pressure on Thursday after Fitch Ratings cut Portugal's sovereign debt rating to junk status, a day after warning that France could lose its triple-A credit rating if European Union leaders fail to take action to prevent the crisis from worsening.
Investors also remained jittery after comments by German Chancellor Angel Merkel underlined concerns that European leaders would be unable to find a resolution to the debt crisis.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery settled at USD106.55 a barrel by close of trade on Friday, the lowest settlement price since October 11.
The Brent contract slumped 0.91% over the week, with the spread between the Brent and the crude contracts standing at USD9.19 a barrel.
Ongoing concerns over the euro zone’s debt crisis have weighed heavily on Brent prices in recent sessions, with the gap between the two contracts narrowing sharply from a record high of USD27.88 a barrel it hit in mid-October.
The euro zone accounted for nearly 16% of global oil consumption in 2010, according to data from British Petroleum.
In the week ahead, investors will be eyeing an auction of Belgian government debt on Monday after ratings agency Standard & Poor's downgraded its rating on Belgium by one notch on Friday.
Meanwhile, euro zone finance ministers are to meet Wednesday to discuss details on leveraging the region's bailout fund, although a major announcement is unlikely.
Also next week, the U.S. is to release its closely watched report on non-farm payrolls. Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD97.36 a barrel by close of trade on Friday, edging 0.21% higher over the week.
Low trading volumes contributed to oil's price volatility on Friday, with many traders still out after Thursday's U.S. Thanksgiving holiday.
Prices fell by as much as 1.8% earlier in the day to trade at USD94.98 a barrel, the lowest since November 9 after Italian 10-year bond yields spiked above 7%, even as the European Central Bank bought bonds in the secondary market.
The rise in Italian borrowing costs came after a disappointing auction of Italian government debt, adding to fears that the debt crisis in the region is deepening.
The auction came two days after Germany, the euro zone’s largest economy, missed its EUR6 billion sales target at an auction of 10-year bonds, in its least successful debt sale since the launch of the single currency.
Also Friday, ratings agency Standard & Poor's downgraded Belgium's credit rating by one notch, with a negative outlook, citing renewed funding and market risk pressure.
However, the sharp price decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid growing geopolitical tensions over Iran's nuclear program and Middle East unrest.
A spokesman for the French Foreign Ministry said Friday that France wants "unprecedented" sanctions on Iran, including a possible ban on oil imports from the country, and is in talks with fellow European Union members ahead of a December 1 summit of EU foreign ministers in Brussels.
Meanwhile, in Saudi Arabia, four people were killed and nine people were injured Friday in clashes between Shiite protestors and Saudi security forces in the oil-rich Eastern Province.
Saudi Arabia is the world’s largest oil producer and biggest exporter among OPEC members, while Iran is the world’s fourth largest oil producer and the second biggest exporter among OPEC members.
Crude prices came under pressure on Thursday after Fitch Ratings cut Portugal's sovereign debt rating to junk status, a day after warning that France could lose its triple-A credit rating if European Union leaders fail to take action to prevent the crisis from worsening.
Investors also remained jittery after comments by German Chancellor Angel Merkel underlined concerns that European leaders would be unable to find a resolution to the debt crisis.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery settled at USD106.55 a barrel by close of trade on Friday, the lowest settlement price since October 11.
The Brent contract slumped 0.91% over the week, with the spread between the Brent and the crude contracts standing at USD9.19 a barrel.
Ongoing concerns over the euro zone’s debt crisis have weighed heavily on Brent prices in recent sessions, with the gap between the two contracts narrowing sharply from a record high of USD27.88 a barrel it hit in mid-October.
The euro zone accounted for nearly 16% of global oil consumption in 2010, according to data from British Petroleum.
In the week ahead, investors will be eyeing an auction of Belgian government debt on Monday after ratings agency Standard & Poor's downgraded its rating on Belgium by one notch on Friday.
Meanwhile, euro zone finance ministers are to meet Wednesday to discuss details on leveraging the region's bailout fund, although a major announcement is unlikely.
Also next week, the U.S. is to release its closely watched report on non-farm payrolls. Oil traders have been paying close attention to readings on U.S. employment levels for signs that people are returning to work, thus driving more and using more energy.