LP:WTI oil price falls back to $99 as European debt concerns hit markets
The price of US WTI oil fell back to near $99 a barrel on Friday as European debt concerns hit stock markets and drag the US oil contract back under the $100 mark.
Latest WTI Oil Price
US Light crude oil futures for January 2012 delivery was trading at $98.63 a barrel, 07.00 GMT this morning in electronic trading on the NYMEX. The December 2011 US oil contract expired yesterday, closing 3 percent lower on the day at $98.96.
Stock Markets
Global stock markets fell on Thursday erasing WTI oil’s earlier gains above $100 as France and Spain, the second and fourth largest economies in the eurozone, faced a sharp spike in borrowing costs.
Asian stock markets are mostly trading notably lower this morning with investors pressing sales, tracking cues from US and European markets where stocks declined sharply overnight amid rising Europe debt contagion fears.
“Crude oil prices retreated in a healthy correction lower, tracking heavy losses in the global stock markets.” said Myrto Sokou, an analyst at Sucden Financial Research.
“People can expect more austerity in Europe, and that can inhibit the ability of economies to grow. Slowing economies means lower demand for petroleum products.” independent oil analyst Andrew Lipow said.
Thursday’s retreat by the US oil contract comes a day after a sharp rally on news that Enbridge and Enterprise Product Partners LP plan to reverse the Seaway pipeline, helping reduce the high inventory levels whilst providing an outlet for inexpensive Midwestern crude to Gulf Coast refiners.
