Oil turns lower on eurozone debt fears

17th June 2011, Comments 0 comments

Crude prices fell on Friday, turning lower as scepticism over a speedy resolution to the Greek debt crisis derailed a bargain-hunting rally, analysts said.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for July delivery, dropped $1.54 to $93.41 a barrel. It had earlier falled to $92.12 which was the lowest level since late February.

Brent North Sea crude for August shed $1.30 to $112.72 a barrel in London late morning deals.

Traders deserted crude after a bargain hunting spree on Wednesday as fears of a prolonged debt crisis in the eurozone came to the fore yet again, said Ker Chung Yang, a commodity analyst for Phillip Futures in Singapore.

"There's no solution in the European crisis so I think this will still affect the crude market," he told AFP.

Tensions were rising over debt-ridden Greece, as German Chancellor Angela Merkel and French President Nicolas Sarkozy made a joint call on Friday for a new rescue package to be agreed upon as quickly as possible.

"We need a solution as soon as possible so that we have clarity ... We have been talking about this for the whole of May and June, discussing the same issues again and again without resolving them," Merkel said.

"Germany and France are determined at the upcoming EU summit ... to say that we want a quick solution," Merkel told reporters in Berlin after talks with Sarkozy.

Crude markets have been rattled by the failure of eurozone finance ministers to reach an deal on a second bailout package aimed at averting a Greek debt default, which could plunge financial markets into crisis.

Prime Minister George Papandreou on Thursday appealed for unity from his own lawmakers as the International Monetary Fund (IMF) insisted there could be no backsliding on agreed austerity measures.


© 2011 AFP

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