Crude oil retreats on the commodity index amid stalled embargos on Irans product

Crude oil futures fell on the commodity index today, as the sector reeled from continuously pessimistic economic reports out of Europe. Lingering fears over a recession in the debt-riddled region cut down the bulk of the gains the commodity oil accumulated during yesterday’s session.

Brent crude oil prices lost 53 cents and settled at $112.75 per barrel on the ICE Futures Exchange in London. The European contract fell as low as $112.62 per barrel at some point in the session before rebounding on the strength of the mounting trouble in Iran.

West Texas Intermediate mirrored the fall of its European counterpart, losing $1.12 and settling at $101.21 per barrel in electronic trading on the New York Mercantile Exchange.

Fitch Ratings again issued a warning to the floundering euro zone that a continually inept handling of the region’s debt crisis would likely lead to the euro’s total collapse. The persisting pressure the agency has been placing on Europe caused a slide in both the equity market and the currency itself.

The commodity oil does however have a steady line of support on the charts in the face of the escalating nuclear disputes between Iran and the powers of the West. Yesterday’s car bombing, which lead to the death of a prominent Iranian nuclear scientists caused a series of threats to be exchanged by the OPEC nations and Israel.

The sanctions against Iran, led by the US are nevertheless encountering some opposition in Asia. The continent is heavily reliant on Iranian oil, with China in particular remaining largely unresponsive to the US demands of cutting down on Iranian oil imports.

Issues surrounding existing contracts also prevented the EU from imposing a total ban on the OPEC member’s crude product. Several key European nation field the bulk of their fuel demands with Iranian oil.

By Chris Termeer