Oil plunges below US$87 in Asia

19-Sep-11

Asian crude oil prices plunged below US$87 a barrel with investors' worries about the debt crisis in the Eurozone fueling a stronger U.S. dollar. The euro has weakened this month amid growing fears that a possible debt default in Greece could trigger similar moves in Portugal, Ireland, Italy and Spain as well as a banking crisis. Benchmark oil for October delivery fell by over a dollar to US$86.8 on the Nymex, while in London, Brent crude for November delivery dropped to US$111.7 on the ICE. The euro fell to US$1.36 vs the dollar, from US$1.37, continuing to weaken this month amid growing fears that a possible debt default in Greece could generate similar moves in Portugal, Ireland, Italy and Spain as well as a banking crisis. At last week's meeting, eurozone finance ministers, decided to delay until October a decision on Euro 8 bln of bailout loans blocked until Greece persuades auditors it is on track to cut its deficit. Disagreements on handling of the matter within Europe and with the United States could affect attempts to mount coordinated action to deal with the crisis before it gets out of hand and impacts the global financial system.