NEW YORK ? Oil tumbled Monday to the lowest level in nearly a month after a drop in Greece's credit rating added to concerns about a slowdown in the European economy.
Benchmark West Texas Intermediate crude dropped $1.99, or 2 percent, to settle at $97.30 per barrel on the New York Mercantile Exchange. Oil is now at its lowest level since May 17.
Investment banks like Goldman Sachs have said oil should rise over the next 18 months. But crude has hovered around $100 per barrel since early May following weak gasoline demand, consumer confidence and jobs data in the U.S. Reports that Saudi Arabia would boost oil production to 10 million barrels per day pushed prices lower late last week.
"You have some guys out there that are pretty fearful of a real drop in oil prices now," analyst Stephen Schork said.
Oil slipped even further after Standard & Poor's cut Greece's credit rating, saying that risks associated with the country's financial bailout are rising, "given the increasingly complicated political environment in Greece coupled with its current difficult economic climate."
The downgrade of Greek debt led to a sell-off in oil as investors bet that Greece's financial troubles could weigh down the entire continent, oil analyst Andrew Lipow said. Europe, which consumes about 18 percent of the world's oil, could see energy demand fall if its economy struggles.
"A default could drag down the rest of the European economies and consequently affect world growth," Lipow said.
Brent crude, which is used to price many international oil varieties, rose 32 cents to settle at $119.10 per barrel on the ICE Futures exchange. Brent supplies are expected to tighten because of production problems in the North Sea, Lipow said.
Meanwhile, Shell declared force majeure on crude contracts from the Trans-Niger Pipeline in West Africa, after rebels apparently cut into it and caused leaks and fires. Under force majeure Shell seeks to be released from supply obligations for reasons beyond its control. The oil company said the leaks have been repaired, but oil loading schedules are delayed.
Average gas pump prices across the U.S. stood at $3.703 per gallon, down about half a cent from Sunday. A gallon of regular is 26.7 cents cheaper than it was a month ago, but it's still more than a dollar higher than it was last year.
In other Nymex trading for July contracts, heating oil was nearly unchanged, settling at $3.1058 per gallon and gasoline futures dropped 2.09 cents to settle at $2.9968 per gallon. Natural gas lost 11.1 cents to settle at $4.646 per 1,000 cubic feet.
___
Chris Kahn can be reached at http://www.twitter.com/ChrisKahnAP
imf desperate housewives aztec canon usa nyx frank sinatra rogue
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.