Crude mixed in Asia on debt worries, strong dollar

Agence France-Presse

Posted at Nov 22 2011 02:25 PM | Updated as of Nov 22 2011 10:25 PM

SINGAPORE - Crude markets were mixed in Asia Tuesday as traders weighed a strengthening dollar and downbeat global economic outlook against Western sanctions on oil-producing Iran, analysts said.

New York's main contract, light sweet crude for January delivery, fell 13 cents to $96.79 per barrel in the afternoon.

Brent North Sea crude for delivery in January advanced 15 cents to $107.03.

Fresh moves aimed at curbing Tehran's nuclear ambitions competed with debt worries in the United States and Europe to influence the market, said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

"On the one side we have weak demand out of Europe, weak demand from the US but on the other hand we have the geopolitical situation in Iran," he told AFP.

Western powers on Monday imposed a new batch of sanctions targeting the vital energy sector, amid speculation of a possible Israeli military strike against Tehran.

But notably, the measures seek to limit the West's links with the country's Central Bank -- which has been key in funnelling the proceeds of energy sales to Iran's government.

Some experts have cautioned that aiming for the central bank could have a profound impact on the country's economy and push up global energy prices at a time when Western economies are already struggling.

But prices were being "weighed by concerns over the global economy and strength in the US dollar," a Phillip Futures report said.

The dollar made headway against the euro in afternoon Asian trade, with the European currency trading at $1.3473 compared with $1.3491 in the morning and $1.3494 late Monday.

A strengthening greenback makes dollar-priced crude more expensive to traders using other currencies, weakening demand and dampening prices.

Worries over the escalating European debt crisis were stoked after Spain's right stormed to its biggest election victory ever on Sunday, raising concerns the new government would not stick to its bailout programme commitments.

In the United States, a US Congress "supercommittee" announced Monday it had failed to reach a debt deal, after angry partisan battles over the best way to revive the struggling economy.

It confirmed widespread expectations that the 12-member committee would fail in its mission to cut US deficit by $1.2 trillion over 10 years amid political wrangling.