NYMEX February crude futures settled $1.77 lower at $99.10/barrel Thursday, erasing earlier gains late in the session amid reports that the European Union may delay an Iranian oil embargo by six months, analysts said.
Front-month crude rallied throughout the session, trading up to $102.98/b amid strength in the euro, but tumbled below $100/b near the close when news reports surfaced about the EU embargo.
"There were some reports from an unnamed European official about a delay in the oil embargo that prompted an exodus of longs in oil," said analyst Gene McGillian of Tradition Energy.
The slide in crude futures coincided with the market's third attempt to break through the $102-$103/b level.
"The market failed to get new buyers and a wave of liquidation selling picked up," McGillian said.
NYMEX February heating oil settled 1.05 cents lower at $3.0541/gal, while February RBOB settled 3.2 cents lower at $2.7313/gal.
ICE February Brent settled 98 cents lower at $111.26/b after trading up to $115.12/b.
The oil complex found support throughout the session amid jitters over the impending shutdown of Nigeria's oil and gas industry (See story, 1552 GMT).
Nigeria's Pengassan union representing 20,000 workers has ordered the total shutdown of the nation's oil and gas industry from midnight on Saturday as a strike over the government's decision to abolish fuel subsidies is in its fourth day.
Analyst Mike Fitzpatrick of Kilduff Group said a successful Spanish bond auction, and both European Central Bank and Bank of England deciding to leave benchmark rates at current levels, had bolstered the euro at the dollar's expense, consequently benefiting crude oil.
But later a statement from the Institute of International Finance, a global banking association that represents private bond holders who are negotiating a reduction of debt that is part of Greece's second bailout, capped euro gains after the group -- who met with Greece's finance Minister in Athens Thursday -- said no resolution to the debt issue was made.
The euro was up 1.21 cents at $1.2827 against the dollar by the NYMEX settle. It traded as high as $1.2846 earlier.
The US Dollar Index on ICE was down about 55 points.
