Oil prices fall amid hopes for Mid-East truce
NEW YORK (AFP) - Oil prices slumped on Tuesday on fresh economic strains in Europe and amid expectations - still unfulfilled late in the day - of a cease-fire between Israel and Gaza.
New York's main contract, WTI light sweet crude for delivery in January, slid US$2.53 from Monday to US$86.75 a barrel. Brent North Sea crude for January shed US$1.87 to US$109.83 a barrel in London trade.
"Rumours abound today as headlines out of the Middle East signaled an 'imminent ceasefire' agreement, but as of this writing nothing has been set in stone," said BMO Capital Markets in its market summary.
"The rumour alone pushed the market lower erasing much of the gains from the previous day sessions, and given all the headline watching, expect continued swings as the Middle East risk premium has re-emerged as the Alpha dog on the street." Oil prices had surged about US$2 a barrel to strike one-month highs on Monday as Israel stepped up its assault on Gaza.