Oil lower on Eurozone woes

Oil prices slipped on Friday as the Eurozone’s debt crisis and dimming hopes for US monetary stimulus reinforced concern about petroleum demand, but disappointing talks between Iran and the UN’s nuclear agency limited losses. The intraday recovery allowed both Brent and US crude to post weekly gains, snapping a string of five straight weekly losses. The euro recovered from lows and was on track to end five weeks of losses versus the dollar, but the single currency felt pressure after Thursday’s downgrade to Spain’s credit rating and on the signs of economic weakness in Italy and Germany. The stronger dollar added pressure to dollar-denominated oil prices. Another round of disappointing talks between the UN International Atomic Energy Agency and a fire at Shell’s oil sands upgrader in Alberta helped oil prices recover from session lows. Federal Reserve Chairman Ben Bernanke’s Thursday appearance before a congressional committee offered little encouragement to investors hoping the Fed would launch a third round of bond buying, or quantitative easing. Expected bailout “The oil market faces an uncertain weekend, especially with respect to the expected bailout request for the Spanish bank and key economic data from China,” said John Kilduff, partner at hedge fund Again Capital LLC in New York. “An almost worse-case scenario was priced in this morning, but dimmed prospects surrounding the Iran nuclear talks and the fire at a Shell upgrader in Alberta reminded everyone of the risk of going into the weekend aggressively short the market.” Brent July crude fell a second day, dipping 46 cents to settle at $99.47 (Dh365) a barrel, well above its $97.19 intraday low. A 1.06 per cent gain for the week avoided a sixth consecutive weekly loss, which would have been the longest string of weekly declines since 2002. Brent prices had recovered above the $100 level during the week after slumping to a 16-month low of $95.63 on Monday. US July crude slipped 72 cents to settle at $84.10, after falling as low as $82. A 1.05 per cent gain for the week also snapped a string of five straight weekly losses. A sixth down week would have been the longest string of weekly losses since 1998. Brent’s premium to US crude increased 26 cents to $15.37 a barrel, based on settlements. Total trading volumes were above 30-day averages for both Brent and US crude. Money managers raised their net US crude futures and options positions in the week to June 5, data from the Commodities Futures Trading Commission showed. From gulfnews