WTI oil price dips below $80 as European debt concerns drag on markets

26 September 2011 26 September 2011

LorieFuller31

WTI oil futures open Monday’s trading session back under $80 a barrel and at six week lows as Greece’s debt concerns continue to drag stock markets and oil prices lower, with European debt concerns now seen as the most serious risk now confronting the world economy.

Latest WTI Oil Price

US Light crude oil futures for November 2011 delivery was trading at $79.64 a barrel, 05.10 GMT this morning in electronic trading on the NYMEX.

Greece Default Concerns

US Oil futures fell under $80 a barrel after finance leaders at the annual IMF meeting in Washington urged European policy makers to step up measures to counter the debt crisis in Europe.

There are unconfirmed reports that a €2 trillion euro deal brokered by the G20 leaders in Washington would act as a safety net for Europe’s banks, in case of a default by Greece, Italy and Spain.

The plan emerged over the weekend, where the €2 trillion world be raised for the EFSF, a 50 percent default on Greece’s €350 billion of debt was also apparently discussed.

“Everyone now fully understands the implications of Greece defaulting. The big key is whether or not the measures are going to help and I think that’s what we have to wait and see.” said Jonathan Barratt, MD of Commodity Broking Services, Sydney.

But many will be looking for more than just money to be thrown at the problem as without structural change it’s hard to see how the problems can be resolved rather than just postponed.

“This plan remains very much up in the air. A lot of Parliaments, Slovakia, Netherlands, Germany, are hesitant about giving the EFSF more scope to act.” said Raoul Ruparel, analyst at think tank Open Europe.

Asian Markets Fall Again

Asian stock markets fell Monday as investors worried about the possibility of a global recession continued to flee riskier assets.

Japan’s Nikkei 225 index fell 1.7 percent to 8,419.36, South Korea’s Kospi index was 0.8 percent lower at 1,684.48, Hong Kong’s Hang Seng index fell 0.7 percent to 17,538.43, however Australia’s S&P/ASX 200 index was up 0.2 percent to 3,911.10.

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