NEW YORK: Oil dropped to a six-month low in New York on concern that Greece will have to exit the euro system, compounding Europe’s debt troubles and curbing fuel demand.
Futures declined 1.2% after German Finance Minister Wolfgang Schaeuble said that market turmoil caused by the euro-zone crisis may last two more years.
Crude capped its third weekly decline as U.S. consumer confidence fell and oil supplies rose to a 22-year high. Prices are down 11% this quarter after climbing 4.2% during the previous three months.
"All of the macroeconomic news has been negative," said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania.
Crude oil for June delivery fell US$1.08 to US$91.48 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 26. Prices retreated 4.8% this week are down 7.4% this year.
Brent oil for July settlement declined 35 cents, or 0.3%, to end the session at US$107.14 a barrel on the London-based ICE Futures Europe exchange. The European benchmark closed at the lowest level since Dec. 20.
Brent’s premium to the July West Texas Intermediate contract in New York widened to $15.34 from $14.30 the day after Enbridge Inc. and Enterprise Products Partners LP said they would reverse flows on the Seaway pipeline this weekend.
The Brent contract may decline to the $99 to $100 lows seen in August and September after breaking through long-term support in the $108.50 to $109.20 area, according to a note by Stephanie Aymes, a technical analyst at Societe Generale SA in London.
Oil dropped to a six-month low in New York on concern that Greece will have to exit the euro system, compounding Europe’s debt troubles and curbing fuel demand. (Bloomberg/tw)
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