Oil prices drop as talks of Greek debt cause worries in Europe
According to Greece officials, they are positive that they will be able close a good deal with private lenders whom they are seeking for the purpose of reducing the nation’s total debt. This will be necessary if Greece is to get a new round of bailout funds to avoid debt default. The discussions are important elements of more efforts to handle the financial crisis of Europe. Concerns have already been raised that the crisis may have an effect on the world’s economy. Moreover, it may decrease oil demand and more energy commodities.
In the recent New York data, benchmark oil price per barrel dropped by $1.62 to end at $98.92. London data showed a similar decline of $1.35 in the Brent crude oil price per barrel of $110.20. Investors are closely watching threats from Iran to block the Strait of Hormuz in case the United States and other nations push through with their plan to give them additional sanctions for their nuclear program.
Foreign ministers of the European Union are expected to talk about the probable sanctions, comprising of an oil embargo versus Iran on their next meeting. Several analysts do not think that Iran can possibly try blocking Persian Gulf’s Strait of Hormuz without the United States quick military involvement. However, shortages in the supply of oil will surely tighten its inventories.
In the meantime, retail prices of gasoline in the United States have remained higher than the previous year despite weak demand. According to AAA and the Oil Price Information Service, the recent average price for gasoline remains similar to the previous weeks: at $3.38 a gallon. At this rate, the price is at least 18 cents higher than the past month and about 27 cents greater than the past year.
In other trading, slight gains and losses were posted on natural gas due to the mild winter season in the majority of the nation. The natural gas price is close to its lowest rate in 10 years, but it increased to reach $2.34 per 1,000 cubic feet during midday trading.
Heating oil prices decreased by 3 cents to a low of $3 a gallon. Similarly, gasoline futures declined 4 cents to settle at $2.78 a gallon.
[...] New York, Benchmark current crude oil prices declined by 17 cents to end at $100.74 a barrel. In London, Brent crude prices reduced to 4 cents [...]