Brent crude futures fell yesterday pressured by diminished expectations for additional stimulus from the US Federal Reserve and by a downgrade of Spain’s credit rating, both of which countered a supportive interest rate cut in China.
Brent July crude fell 71¢, or 0.71%, to settle at $99.93 a barrel, having traded from $99.58 to $102.45.
In New York, oil fell slightly yesterday as comments from US Federal Reserve Chairman Ben Bernanke dimmed hopes for additional stimulus measures and offset support from a surprise interest rate cut by China.
Crude prices shot higher in early trade on expectations the first rate cut by China since the depths of the global financial crisis would boost demand in the world’s second largest oil consumer.
Prices later slid following Bernanke’s testimony to Congress that offered little encouragement to investors who were hoping the Fed would launch a third round of bond buys, or quantitative easing (QE).
US crude futures see-sawed, inching up 12 cents to $85.14 a barrel, off earlier highs of $87.03.
After a string of supply disruptions and worries about the loss of Iranian oil due to Western sanctions pushed Brent to 2012 highs over $128 a barrel in early March, concerns about the global economy and the eurozone crisis have sent crude prices tumbling.
Brent dipped below $100 a barrel last week for the first time since October 2011, and both contracts have been below 30 on the 14-day relative strength index - typically a technical sign indicating a commodity has been oversold - since mid-May.
Oil also found early support after a bond sale by Spain met with strong demand, passing a key test of its ability to tap investors after a minister said earlier this week the country was being cut off from the markets.from gulf times.