Oil Lingers Below $98 After Disappointing ECB Plan

By Salon Staff

Published December 9, 2011 8:45AM (EST)

BANGKOK (AP) — Oil prices fell below $98 per barrel Friday in Asia as uncertainty surrounded the outcome of a critical meeting of Europe's leaders aimed at solving the continent's debt crisis.

Benchmark crude for January delivery was down 49 cents to $97.85 a barrel in late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $2.15 to end Thursday at $98.34.

In London, Brent crude was down 67 cents at $107.28 on the ICE futures exchange.

Investors are closely watching Europe's struggles to contain a banking crisis that threatens to spark global financial havoc. Without radical action, the region could tip into recession — reducing energy demand within Europe and among major manufacturing countries like China that export goods to the eurozone.

A critical European Union summit aimed at reaching a deal to impose tougher rules for keeping national budgets under control ends Friday. So far, investors appear unconvinced that an agreement to definitely fix to the crisis will be forthcoming. Asian stock markets fell, including benchmarks in Japan, South Korea and Hong Kong.

"There is some pre-meeting concerns about the ability of the various governments to put together a real plan to solve the debt crisis," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "With economic uncertainties, it is not surprising that oil futures are being brought down to Earth a bit."

Oil prices slipped Thursday after the European Central Bank disappointed investors with only modest steps to revive the troubled economies of the 17-nation eurozone.

The ECB cut interest rates, but officials said there was no plan for major government bond purchases.

In other energy trading on the Nymex, natural gas fell 1.8 cents at $3.44 per 1,000 cubic feet. Heating oil fell 1.1 cents to $2.92 a gallon and gasoline futures rose 1.3 cents to $2.56 a gallon.

Salon Staff

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