Oil fell to the lowest level in almost eight weeks in New York on concern that Greece will default on debt payments, leading to slower global economic growth and lower fuel consumption. Futures tumbled as much as 3 percent as European finance ministers met today in Luxembourg to determine whether Greece has done enough to mitigate the default threat. The euro dropped to an eight-month low against the dollar, curbing commodities’ appeal an alternative investment to the U.S. currency. “Greece is taking one more step toward the precipice and our markets sell off,” said Stephen Schork, president of Schork Group Inc., an energy advisory company in Villanova, Pennsylvania. “We’re in a well-defined bearish trend in all commodities, especially crude oil and natural gas, and we’re gunning for a sub-$75 level.” Crude for November delivery fell $1.75, or 2.2 percent, to $77.45 a barrel at 9:26 a.m. on the New York Mercantile Exchange. Earlier, it touched $76.85, the lowest price since Aug. 9, when futures reached a 10-month low of $75.71. Brent oil for November settlement slid $1.65, or 1.6 percent, to $101.11 a barrel on the London-based ICE Futures Europe exchange after falling as low as $100.71. A close below $101.32 would represent a decline of more than 20 percent from the April 8 settlement price of $126.65 a barrel, meeting the common definition of a bear market. Euro Drops The euro fell 0.5 percent to $1.3317 at 9:35 a.m. in New York. Earlier, it touched $1.3306, its lowest level since Jan. 18. The Greek government said today it passed a new budget backed by its international creditors, including larger deficits than previously forecast, as the country moves closer to securing an 8 billion-euro ($10.7 billion) aid payout needed to avoid default. Prime Minister George Papandreou’s Cabinet also passed 6.6 billion euros of austerity measures yesterday to cut the 2012 deficit to 6.8 percent of gross domestic product, missing the 6.5 percent goal previously set with the European Union, International Monetary Fund and European Central Bank, known as the troika. Finance Minister Evangelos Venizelos previously said Greece would miss the targets. “A Greek default is becoming more and more likely amid reports the country will miss debt-reduction targets,” said James Zhang, a strategist at Standard Bank Plc in London, who forecasts Brent will average $98 a barrel in the fourth quarter. “The weaker euro and falling equity market are pulling oil prices lower.” To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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