Crude falls more than $1/bbl on possible ECB plans

05 September 2012 16:31  [Source: ICIS news]

LONDON (ICIS)--Crude oil futures fell by more than $1.00/bbl on Wednesday as investors remain cautious of the European Central Bank’s plans to buy unlimited amounts of short-term government debt.

By 14:22 GMT, the front-month October ICE Brent contract fell to an intra-day low at $112.79/bbl, a loss of $1.39/bbl. The contract then edged a little higher to trade around $113.45/bbl.

At the same time, the front-month October NYMEX WTI contract was trading around $94.70/bbl, having touched an intra-day low at $94.26/bbl, a loss of $1.04/bbl.

The European Central Bank’s President, Mario Draghi said previously that the bank is looking at plans to purchase short-term government bonds to help troubled economies such as Greece, Spain and Italy.

If the ECB buys government bonds, it is likely to exert some downward pressure on yields which are paid by the borrower.

By: Kawai Wong
+44 20 8652 3214

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