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Oil falls more than 2 percent on Europe concerns
Source: Agencies |
September 20, 2011, Tuesday
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OIL dropped more than 2 percent yesterday on growing concerns about Europe's ability to solve its credit crisis.
Benchmark crude lost US$2.26, or 2.6 percent, to finish at US$85.70 per barrel in New York. Brent crude fell US$3.098, or 2.7 percent, to end at US$109.14 in London.
The drop mirrored a broad decline in stock markets. The Dow Jones industrial average, the Standard & Poor's 500 and the Nasdaq were all down.
The dollar also rose against other major currencies, including the euro. That tends to push down oil prices, because oil is priced in US currency and a rising dollar makes crude more expensive for investors with foreign money.
Oil has been falling since Friday, when European leaders delayed more emergency funds to Greece. If the Greek government defaults, it could destabilize the economies of other countries as well.
Greece's finance minister said yesterday that his country will try to avoid international "blackmail and humiliation" by speeding up reforms and civil-service staff cuts.
Analyst Stephen Schork said energy traders are looking for greater assurances that the eurozone leaders, especially Germany, remain committed to bankrolling aid programs for weaker members.
"The northern European countries are tired of paying for their neighbors on the Mediterranean," he said. "You need some sort of assurance that the Germans will play ball."
In other commodities trading, heating oil lost 6.42 cents, or 2.1 percent, to finish at US$2.9447 per gallon and gasoline futures fell 8.76 cents, or 3.2 percent, to end at US$2.6965 per gallon. Natural gas was up 2 cents to finish the day at US$3.829 per 1,000 cubic feet.
Benchmark crude lost US$2.26, or 2.6 percent, to finish at US$85.70 per barrel in New York. Brent crude fell US$3.098, or 2.7 percent, to end at US$109.14 in London.
The drop mirrored a broad decline in stock markets. The Dow Jones industrial average, the Standard & Poor's 500 and the Nasdaq were all down.
The dollar also rose against other major currencies, including the euro. That tends to push down oil prices, because oil is priced in US currency and a rising dollar makes crude more expensive for investors with foreign money.
Oil has been falling since Friday, when European leaders delayed more emergency funds to Greece. If the Greek government defaults, it could destabilize the economies of other countries as well.
Greece's finance minister said yesterday that his country will try to avoid international "blackmail and humiliation" by speeding up reforms and civil-service staff cuts.
Analyst Stephen Schork said energy traders are looking for greater assurances that the eurozone leaders, especially Germany, remain committed to bankrolling aid programs for weaker members.
"The northern European countries are tired of paying for their neighbors on the Mediterranean," he said. "You need some sort of assurance that the Germans will play ball."
In other commodities trading, heating oil lost 6.42 cents, or 2.1 percent, to finish at US$2.9447 per gallon and gasoline futures fell 8.76 cents, or 3.2 percent, to end at US$2.6965 per gallon. Natural gas was up 2 cents to finish the day at US$3.829 per 1,000 cubic feet.
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