Crude oil futures trim losses; Cyprus bailout vote awaited

 Crude oil futures came off the lowest levels of the session during U.S. morning hours on Monday, as concerns that a controversial bailout deal for Cyprus could destabilize financial markets in the euro zone eased Oil prices struggled due to a stronger U.S. dollar, as dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.5% to trade at 82.77. On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD93.20 a barrel during U.S. morning trade, down 0.3% on the day.

New York-traded oil prices fell by as much as 1.8% earlier in the session to hit a daily low of USD91.79 a barrel. Nymex oil prices rose to USD93.82 a barrel on Friday, the strongest level since February 25.

Oil prices came off the lows as market sentiment stabilized following reports that the government in Cyprus was preparing a new deposit tax proposal to lessen the impact on smaller depositors. State media reported that a parliamentary vote on the levy was to be postponed until Tuesday.Oil prices were deeply in the red earlier as appetite for riskier assets weakened broadly following news that a one-time tax was to be imposed on bank deposit holders as part of a EUR10 billion bailout deal for Cyprus.

In exchange for the rescue money, international creditors would impose a one-time tax of 6.75% on all bank deposits under EUR100,000 and 9.9% over that amount. The agreement marked the first time since the onset of the euro zone debt crisis that depositors have been forced to take a haircut in return for financial aid.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery shed 0.5% to trade at USD109.20 a barrel, with the spread between the Brent and crude contracts standing at USD16.00 a barrel.