NYMEX January crude futures settled $5.19 lower at $94.95/barrel Wednesday, falling sharply as the euro fell to an 11-month low as fears of European debt contagion sent jitters through the marketplace.
January heating oil settled 9.89 cents lower at $2.8299/gal and January RBOB settled 12.17 cents lower at $2.5037/gal.
ICE January Brent, which dipped to a more than two-month low at $104.36/b, settled down $4.48 at $105.02/b.
OPEC ministers Wednesday in Vienna agreed on a new crude production ceiling of 30 million b/d that covers all 12 members, including Libya and Iraq, but does not include individual quotas. The deal effectively legitimized current freewheeling production.
Continued concerns over eurozone sovereign debt and low liquidity were the main factors in the selloff, analysts said, leading NYMEX front month crude to dip below the 200-day moving average at $96/b.
Analyst Addison Armstrong of Tradition Energy said a lack of liquidity, close to what is normally seen during the week between Christmas and the new year, was the backdrop to the weakness across commodities.
"People are taking profits from the run-up earlier in the year and looking to close their books on a high note," Armstrong said.
The euro fell to an 11-month low of $1.2945 and was trading down 57 points at $1.2979 in afternoon US trade, while the US Dollar Index on ICE reached an 11-month high at 80.730.
"Most of the correction is dollar driven, the dollar has been advancing all day against the euro and commodity currencies like the Australian dollar," said Harry Tchilinguirian, analyst at BNP Paribas.
"The risk-off move comes against weaker-than-expected progression in Chinese monetary data released this morning, but also ongoing concerns in the eurozone in relation to sovereign debt," he said.
China's money supply expanded by 12.7% in November, the least since 2001, according to data released by the People's Bank of China.
In products, earlier declines in RBOB futures were exacerbated by a bearish US government report that showed a rise in domestic inventories and sluggish demand.
US Energy Information Administration data showed a 3.824-million-barrel build in US gasoline stocks for the week ending December 9, while implied demand, which was up a slight 92,000 b/d on the week, remains 682,000 b/d below year-ago levels.
On a four-week moving average, gasoline demand was down 4.5% during the reporting week versus the same period in 2010.
