WTI oil futures open Thursday’s trading session back closer to $95 a barrel as the ongoing debt crisis looming over euro countries Italy and Greece hits global stock markets once again, capping recent oil price gains.
Latest WTI Oil Price
US Light crude oil futures for December 2011 delivery was trading at $95.67 a barrel, 06.20 GMT this morning in electronic trading on the NYMEX. The US oil contract closed yesterday’s session down 1.1 percent at $95.74.
Euro Debt Crisis
The political uncertainty in Italy sparked another global sell off on stock markets with the US Dow Jones loosing more than 3 percent, its worst decline since 22nd September, the euro slipped 2 percent against the US dollar and Italy’s key borrowing rate spiked to 7.4 percent.
As the third largest economy in Europe, Italy’s 1.9 trillion euro debt is considered too large for other European countries to absorb and a default by Italy could lead to the disintegration of the euro currency.
Investors were further unnerved after government talks in Greece aimed at avoiding a default on its massive debts broke down. Markets fear that a Greek default would lead to huge losses for European banks.
“Oil prices are starting to pull back as the situation in Italy goes from bad to worse.” said Phil Flynn of PFG Best.
Meanwhile, Asian markets are trading lower this morning with Japan’s Nikkei 225 index falling 2.8 percent to 8,505.79 and Hong Kong’s Hang Seng dived 4.5 percent to 19,117.51. South Korea’s Kospi slid 3.7 percent to 1,836.68 and Australia’s S&P/ASX 200 lost 2.4 percent to 4,241.
“Really what it boils down to is, if the economy in Europe collapses, crude oil demand will go down and the price of oil will go lower. These markets are all sort of working together.” said Mark Waggoner, president of brokerage Excel Futures.
Original post:
WTI oil trading back near $95 as euro debt crisis hits stock markets
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