Oil Falls After Greek Election Sends Euro Tumbling

Oil slid in early Asian trade on Monday, with U.S. crude falling close to a six-year low, after Greece’s election results heightened uncertainty in the euro zone and depressed the bloc’s currency against the dollar.

Greece’s left-wing Syriza appeared on course to trounce the ruling conservatives in Sunday’s snap election, setting up a possible confrontation with international creditors.

March Brent crude fell 44 cents to $48.35 a barrel by 0442 GMT, wiping out light gains made on Friday after the death of the Saudi King Abdullah, but off an early low of $47.85.

West Texas Intermediate (WTI) crude for March delivery was trading down 57 cents at $45.02 a barrel. Front-month WTI earlier slid to an intraday low of $44.35, just above $44.20 hit on Jan. 13, which was the lowest since April 2009.

Global financial markets reacted to the Greek election on Monday with the euro dropping to near an 11-year low against the dollar.

The common currency came under pressure on Friday after the European Central Bank said it would flood markets with over a trillion euros, more than expected, to prevent the euro zone from sliding into deflation.

“We saw the dollar rally again on Friday and this was largely on the back of ECB stimulus measures and the euro,” Barnabas Gan, an economist at OCBC Bank in Singapore.

“Oil being a dollar-denominated commodity has been depressed by a stronger dollar.”

Brent may revisit its Jan. 13 low of $45.19 per barrel over the next four weeks, Reuters market analyst Wang Tao said.

Brent’s premium to WTI has widened to more than $3 after U.S. crude stockpiles rose by the most in over two decades.

“Oil markets decoupled as WTI sank,” Stephen Schork, editor of the Pennsylvania-based Schork Report said in a note. “As of Friday we have switched our daily bias to bearish in WTI.”

Money managers cut their net long U.S. crude futures and options positions in the week to Jan. 20, the U.S. Commodity Futures Trading Commission said on Friday.

In Saudi Arabia, new King Salman was quick to keep veteran oil minister Ali al-Naimi on Friday, in a message aimed at calming a jittery energy market following the death of King Abdullah.

In the United States, a swath of the East Coast from Philadelphia to New York City to Maine was bracing for a potentially historic blizzard on Monday.