Brent crude oil slid lower on Monday morning following news that eurozone leaders have agreed to lend money to Cyrus if the country imposes a levy on banks to help fund the rescue package. The commodity traded at $108.33 at 10:33 GMT on Monday as the nation's government prepared to vote on the law.
The unusual terms of the bailout have caused many to worry that levy could become a precedent for future government funding needs. Investors pulled their money from surrounding eurozone countries in fear that their accounts could receive the same treatment.
Although positive data from the US helped to support prices, many are expecting to see Brent prices fluctuate over the next few days. The Cyprus deal will play a large part in driving prices and investors will be watching to see if the levy in Cyprus will have an effect on other countries as well.
According to CNBC, the Federal Reserve released data showing that factory production increased more than expected in February after dropping 0.3 percent in January. The 0.8 percent increase in February added to growing confidence that the nation was on its way to recovery.
Tension between the West and Iran also gave Brent prices some support as many worried that Iran's disputed nuclear development program could cause supply interruptions. Concern about Iran's nuclear capability has kept Brent above $100 a barrel since the beginning of 2012 after sanctions designed to cut funding to the program limited Iranian oil exports.
This month western diplomats will work to negotiate the nuclear development program's end in exchange for eased sanctions.
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