WTI oil price back to $97 as markets sell off on EU summit failure

WTI oil futures open Friday’s trading session back near $97 a barrel as stock markets and oil prices both sold off late yesterday on growing doubts that European leaders can forge a credible borrowing scheme to tackle the euro zone’s debt crisis at an EU summit in Brussels.

Latest WTI Oil Price

US Light crude oil futures for January 2012 delivery was trading at $97.69 a barrel, 07.17 GMT this morning in electronic trading on the NYMEX.

The US oil contract closed off Thursday’s trading session at $97.97 a barrel, or 2.6 percent lower on the day.

EU Summit Failure

European Union leaders failed to get all of the bloc’s 27 members to back a change in the EU treaty to tighten their fiscal coordination as a decisive summit in Brussels ended its first day in the early hours Friday.

Speaking after long talks in Brussels, French leader Nicolas Sarkozy said the 17 eurozone states and other EU members would work on a separate pact instead.

The UK and Hungary will play no part in a new inter governmental treaty, while Sweden and the Czech Republic will consult their parliaments before making a decision.

The EU has struggled to unite to stem a 2 year old spiral of debt that started in Greece, has plunged the eurozone into crisis, and now threatens to send the global economy back into recession.

Even after Friday’s long-awaited deal, watched by governments and markets worldwide, the European leaders have huge hurdles still ahead.

They are meeting again later Friday to work out what exactly their new treaty will contain and how violators of its strict budget rules will be policed. They want it written by March.

“The situation in Europe swings between optimism and pessimism every single day. Lately, the market has built in a lot of optimism and I’m afraid of a letdown.” said Tom Bentz, director at BNP Paribas Prime Brokerage, New York.

In Asia, stock markets fell this morning, with Japan down 1.6 percent, Australia losing 1.4 percent and South Korea falling 1.9 percent.

Get ready for another possible sell off in oil, like all global markets, crude oil prices have been gripped by concerns in recent months that the crisis in European could trigger a global economic slowdown.

Originally posted here:
WTI oil price back to $97 as markets sell off on EU summit failure