Futures dropped as much as 0.7 percent after gaining the most since October last week. Pro-independence parties in Spain’s Catalonia won a regional vote, strengthening a drive for a referendum on secession in defiance of the nation’s Prime Minister. European officials gather in Brussels today, less than a week after an all-night meeting failed to yield an agreement. Oil rose last week because of concern that fighting between Israel and Hamas and unrest in Egypt would spread and disrupt Middle Eastern crude supplies.
“It’s a really bad circle,” Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark, said of Europe’s attempts to resolve the debt crisis. “The geopolitical risk premium is the major wild card in the weeks and months to come.”
West Texas Intermediate, or WTI, for January delivery fell as much as 64 cents to $87.64 a barrel on the New York Mercantile Exchange and was at $87.88 at 1:34 p.m. London time. Futures gained 90 cents to $88.28 a barrel on Nov. 23, the highest settlement since Nov. 19. Prices rose 1.9 percent last week and are down 11 percent this year.
Brent for January settlement lost 14 cents to $111.24 a barrel on the ICE Futures Europe exchange. The European benchmark crude was at a premium of $23.36 to New York-traded WTI, compared with $23.10 on Nov. 23.
Prices retreated even after Abu Dhabi National Energy Co., known as Taqa, shut three oil and natural gas fields in the North Sea, where Brent is produced, and evacuated 92 workers from its North Cormorant platform after a gas leak.
“The leak has stopped and the situation is under control,” the company said today in a statement. “There will be an investigation to establish the cause of the incident.”
Brent is poised to overtake WTI as the world’s most-traded commodity for the first year since the futures were created, according to data from the ICE and Nymex compiled by Bloomberg. Daily trading in Brent jumped 14 percent to average 567,000 contracts in the year to Nov. 20 compared with all of 2011, while WTI fell 17 percent to 575,000.
The number of Brent futures changing hands has exceeded those for WTI every month from April through October, the longest streak since at least 1995.
Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 97,096 lots, the London-based exchange said today in its weekly Commitment of Traders report. The increase of 19,595 lots from last week is the biggest since July 3 and brings net-longs to their highest level since Oct. 16.
Egypt’s President Mohamed Mursi will meet the nation’s judicial council today, the state-run Middle East News Agency reported, citing Yasser Ali, a presidential spokesman. Protests have taken place since Mursi issued a Nov. 22 decree that prevents his actions from being challenged by the courts.
Thousands of people poured into Cairo’s Tahrir Square, the focal point for an uprising last year, to protest Mursi’s order after the Egyptian judiciary announced Nov. 24 that courts will suspend work until the decision is rescinded.
Israel and Hamas agreed on a cease-fire last week, ending eight days of air and missile strikes that left more than 160 Palestinians and six Israelis dead.
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