Oil prices stable amid US holiday

4th July 2011, Comments 0 comments

World oil prices were little changed on Monday, with the Independence Day public holiday in the United States making for light trade.

Brent North Sea crude for delivery in August dipped 17 cents to $111.60 a barrel in late London deals.

New York's main contract, West Texas Intermediate for August, edged up five cents to $94.99 in electronic deals as US physical markets were shut.

"With the US markets closed for the Independence Day, crude oil prices are likely to consolidate today while currency movements might provide some direction," said analyst Myrto Sokou at the Sucden Financial Research brokerage.

"However, in an absence of major macroeconomic figures, it is likely to (mean) ... light trading volumes."

Prices rallied last week after apparent progress on the Greek debt crisis eased worries about a potential eurozone default and tempted more traders into riskier investments.

Eurozone finance ministers then cleared the way on Saturday for Greece to receive the next 12-billion-euro slice of its 110-billion-euro ($160-billion) EU-IMF bailout.

However on Monday, ratings agency Standard & Poor's warned that debt rollover plans for crisis-hit Greece could amount to a "selective default."

A key factor supporting oil prices is the "confirmation that Greece will get the batch of bailout money from the eurozone," said Victor Shum, a Singapore-based analyst with Purvin and Gertz energy consultancy.

"That has eased concerns about Greece sinking the European region into a downturn," he told AFP.

Any Greek default would shatter investor confidence, rock global financial markets and slash European demand for energy, according to analysts.

Oil prices were hit late last week on news of a sharp manufacturing slowdown in China, the world's biggest consumer of energy, and downbeat figures fro Britain and the eurozone.

Slightly more positive figures for June from the United States helped sentiment, however, on Friday.

"For the rest of 2011, we could expect a potential slowdown of the Chinese economy due to recent fairly poor Chinese macroeconomic indicators," analyst Sokou said on Monday.

"In the United States, economic indicators are also fairly weak giving mixed signals. In the meantime, the situation in the eurozone looks fairly volatile with investors being cautious as the Greek debt issues are still pending."

© 2011 AFP

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