Oil dropped to a three-week low after two European Union officials said an embargo on Iranian crude imports may be postponed for six months.
Crude fell 0.4 percent as officials said that the ban would be delayed to allow nations to find new supply. International Atomic Energy Agency inspectors will go to Tehran to discuss Iran’s nuclear program, two diplomats said. Futures also declined after Standard & Poor’s decision to strip France of its AAA credit rating.
Markets are still digesting the Iran news. Prices dropped on the news that the EU had pushed back the embargo and may fall further when we get more information about the inspectors’ visit. Anything that reduces tension with Iran sends prices lower.
Crude oil for February delivery fell 40 cents to $98.70 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 21. Oil dropped 2.8 percent this week and is up 8 percent from a year earlier.
Brent oil for February settlement declined 82 cents, or 0.7 percent, to end the session at $110.44 a barrel on the London – based ICE Futures Europe exchange. The February contract expires Jan. 16. March futures dropped 70 cents, or 0.6 percent, to $110.35 a barrel.