Oil Fall as European Finance Ministers Meet on Greece
By Mark Shenk
Oil dropped as euro-area finance ministers meet to negotiate a bailout payment for Greece and as American leaders prepared to wrestle with a budget agreement.
Futures fell as much as 1.1 percent as officials gathered in Brussels to discuss Greek aid less than a week after a meeting failed to yield an agreement. Republicans and Democrats in the U.S. need to find a budget compromise to avoid triggering $607 billion in tax gains and spending cuts in January that the Congressional Budget Office said could lead to a recession.
“The outcome of the European finance ministers’ meeting is the main focus of the markets today,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Given the direction the market is moving, it appears most people aren’t expecting a positive outcome.”
Crude oil for January delivery declined 78 cents, or 0.9 percent, to $87.50 a barrel at 9:37 a.m. on the New York Mercantile Exchange. Prices are down 11 percent this year.
Brent oil for January settlement fell 55 cents, or 0.5 percent, to $110.83 a barrel on the London-based ICE Futures Europe exchange.
Finance ministers are dealing with the consequences of a Nov. 12 decision to give Greece two extra years, until 2016, to cut its budget deficit. At an overnight session lasting more than 11 hours a week later, the ministers failed to fill the resulting financing gap or show that Greek debt would drop to a target of 120 percent of gross domestic product by 2020, a condition set by the International Monetary Fund.
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