Futures fell as much as 1 percent as the euro weakened against the dollar. The cost of insuring against default on Portuguese and Spanish debt climbed to records yesterday after Ireland secured financial aid this weekend. Oil also retreated on speculation that measures to slow China's economy will damp crude demand in the world's largest energy user.

"People are afraid that the EU will next have to rescue Portugal, Spain, and further on Italy, so the debt situation of these countries is critical," said Gerrit Zambo, a trader at Bayerische Landesbank in Munich.

January futures fell as much as 85 cents to $84.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $85.38 at 12:21 p.m. London time. Prices are up 4.8 percent this month. Brent for January settlement fell as much as 74 cents, or 0.9 percent, to $86.60 a barrel on the ICE Futures Europe exchange in London.

Crude, which is headed for a third monthly gain, climbed 2.4 percent yesterday to $85.73, the highest settlement since Nov. 11, after a report showed U.S. shoppers increased purchases ahead of the Christmas holiday, raising expectations of climbing fuel demand as the economy improves.

Source: www.ordons.com