SINGAPORE (Reuters) - Brent crude dropped below $117 a barrel on Monday as the ongoing debt crises in Europe and the United States kept skittish investors away from risky assets, while the possibility of a second IEA oil release also weighed on sentiment.
Policymakers on both sides of the Atlantic have offered no clear solutions to markets on their respective debt problems, keeping investors risk averse.
Brent fell 69 cents to $116.57 a barrel at 0710 GMT, after having touched a low of $116.36 earlier in the session, while U.S. crude fell 38 cents to $96.86 a barrel.
The International Energy Agency, which needs the backing of all 28 members if it is to pour more oil on a volatile crude market, is expected to confer with its member countries by July 23 to decide whether to draw further on emergency oil stocks. Last month, member countries released 60 million barrels, only the third such move in the IEA's history.
The IEA stock release had driven Brent prices down to $102.28 on June 27, but now prices are at a similar level to where the front-month contract was trading when the Organization of the Petroleum Exporting Countries failed to agree on a collective output increase on June 8.
"It is too early for the IEA to release stocks for the second time within such a short time," said Serene Lim of ANZ bank. "In the previous release, there were some countries that were not producing or releasing the stipulated amount."
Republican and Democratic senators sought on Sunday to craft a plan that could avert an unprecedented default by the top oil consumer Unites States while making modest cuts in the deficit.
But there were few signs of progress as the August 2 deadline to avoid a default drew dangerously close. Continued...
