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West Texas Intermediate crude pared losses as equities came off intraday lows after European policy makers signaled flexibility on the application of an unprecedented bank tax in Cyprus.
Futures slipped for the first time in three days as the levy on bank savings threatened to worsen Europe’s debt crisis. While demanding that the tax raise the targeted 5.8 billion euros ($7.6 billion), officials said easing the cost to smaller savers was up to Cyprus.
Finance ministers in the euro area reached an agreement on March 16 forcing depositors in Cypriot banks to share in the cost of the latest bailout.
Cyprus President Nicos Anastasiades will try to persuade lawmakers to back a plan to impose a bank tax on the island nation’s depositors as part of a 10 billion-euro ($13 billion) bailout aimed at preventing a financial collapse and a possible departure from the euro area. A vote on the tax was delayed for a second day until tomorrow.
Banks in the island nation will remain shut tomorrow and March 20, a government official said, asking not to be identified.
Oil also pared losses after Oil Minister Abdulbari al-Arusi said Waha Oil Co.’s pipeline in Libya was shut because of a strike at its Gialo field, cutting the country’s crude output by 120,000 barrels a day.
WTI for April delivery declined to $91.76 a barrel and later climbed to $93.44 on the New York Mercantile Exchange after falling to $91.76.
Brent for May settlement dropped 66 cents, or 0.6 percent, to $109.16 a barrel on the London-based ICE Futures Europe exchange. Volume was 12 percent below the 100-day average. The European benchmark grade was at a premium of $15.48 to WTI for the same month. That’s down from $16 on March 15 and is the lowest level since January.
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