Crude slips to two week lows

Concerns about debt problems in Europe and the US pressure crude oil prices today

Crude prices ended lower on Monday, 21 November at Nymex. Concerns about debt problems in Europe and the US pressured crude oil prices today.

Light and sweet crude for January delivery fell $0.75 (0.8%) to $96.92 a barrel on the New York Mercantile Exchange on Monday. The contract fell to a low of $95.24 during intra day trading. It was lowest settlement for crude in almost two weeks. Last week, crude lost 1.6%. For the month of October, oil futures gained 18%. During the third quarter ending in September, crude incurred losses of 17%. It was the worst quarterly performance for crude in almost two years.



US stocks slumped on Monday ahead of an expected announcement from the congressional super committee that it failed to agree on reducing the federal deficit. The apparent stalemate in Washington added to market jitters over Europe's debt crisis, prompting investors to flee equities and flock to perceived safe havens including the U.S. dollar and government bonds.

Moody's Investors Service repeated in a weekly credit update on Monday that rising debt costs and uncertain economic outlook pose a danger to France's AAA rating.

In the currency market on Monday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies traded higher by 0.3%.

Among the day's economic data expected at Wall Street, sales of existing homes in US rose 1.4% in October to a 4.97 million-unit pace from a slightly downward revision to 4.90 million-unit pace in September. Contract cancellations jumped to 33%.

Among other energy products on Monday, prices for other energy products were mixed. December heating oil lost 4 cents, or 1.3%, to end at $2.99 a gallon. December gasoline, however, turned higher and ended up 1 cent, or 0.4%, at $2.49 a gallon.

December natural gas also gained, settling 8 cents higher, or 2.5%, at $3.40 per million British thermal units. Futures rallied sharply into positive territory, notching highs at $3.44, in late morning trade. They did pull back from those highs in the afternoon session.

At the MCX, crude oil for November delivery closed higher by Rs 14 (0.3%) at Rs 5,038/barrel. Natural gas for November delivery closed at Rs 179.3, higher by Rs 6.8 (3.9%).