Oil prices re­treat world­wide, com­men­ta­tors point to Greece debt de­fault

The China Post - - BUSINESS INDEX & -

Oil prices dropped on Mon­day, track­ing a sell-off in global eq­uity mar­kets and the euro caused by fears of a Greek debt de­fault, an­a­lysts said.

U.S. bench­mark West Texas In­ter­me­di­ate for Au­gust de­liv­ery slid US$1.40 to US$58.23 com­pared with Fri­day’s close.

Brent North Sea crude for Au­gust lost US$1.71 to stand at US$61.55 a bar­rel in Lon­don mid­day trade.

Daniel Ang, in­vest­ment an­a­lyst at Phillip Fu­tures, said the weak­en­ing euro “could see crude prices con­tinue to drop, sim­i­lar to what we have seen at mar­ket open.”

A more ex­pen­sive U.S. cur­rency makes dol­lar-priced crude more ex­pen­sive for buy­ers hold­ing the Euro­pean sin­gle cur­rency, dent­ing de­mand.

Else­where, deal­ers are wait­ing to see if Iran and ma­jor world pow­ers can reach a deal on curb­ing Tehran’s nu­clear pro­gram by the end of the month.

Such a move would al­low Western pow­ers to re­move sanc­tions, paving the way for more Ira­nian crude to hit the al­ready over­sup­plied in­ter­na­tional mar­ket.

A se­nior U.S. of­fi­cial at the talks in Vi­enna would not say there was no chance of nail­ing down the ac- cord by Tues­day, but ad­mit­ted “it’s fair to say the par­ties are plan­ning to stay past (June 30) to keep ne­go­ti­at­ing.”

Iran has the world’s fourth-largest oil re­serves but its ex­ports have fallen from more than 2.2 mil­lion bar­rels per day in 2011 to about 1.3 mil­lion be­cause of the sanc­tions.

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