Wednesday, May 5, 2010
Crude Oil Tumbles Below $80 as Euro Drops on Greek Debt Crisis
Crude oil fell below $80 a barrel in New York as the euro dropped against the dollar on concern that Greece’s bailout may have to be extended to other indebted nations. Oil slipped as much as 4.3 percent as the common currency tumbled to its lowest level against the dollar since March 2009, curbing the appeal of commodities to investors. U.S. stockpiles of crude oil rose 2.76 million barrels last week to the highest level since June, an Energy Department report showed today.
“The Greek crisis appears to be spreading, which is raising concerns about the economic recovery,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Prices have been supported on expectations that demand will climb as economies rebound. Now the focus may return to the market fundamentals and the huge oversupply of oil.”
Crude oil for June delivery fell $2.54, or 3.1 percent, to $80.20 a barrel at 10:37 a.m. on the New York Mercantile Exchange. Futures touched $79.15, the lowest level since March 22. Prices slumped 6.9 percent yesterday and today, the biggest two day drop since Feb. 4 and 5.
Brent oil for June settlement declined $2.44, or 2.9 percent, to $83.23 a barrel on the London based ICE Futures Europe exchange. European Central Bank council member Axel Weber said today there is a threat of “grave contagion effects” in the euro area. The euro fell 1 percent to $1.2855, down from $1.2987 yesterday. The 16 nation currency touched $1.2804, the weakest level since March 12, 2009.....Read the entire article.
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