Global crude oil prices sink amid euro zone debt concerns

Crude oil prices fell back on the global charts today, as old fears of a recession in Europe continued to reign on the market.

According to the most recent reports from Germany, the nation’s economy shrank by more than 0.25% in the last quarter of 2011. Spain’s faltering industrial sector also took a toll on the crude oil price chart.

Signs of financial weakening in the last remaining strong economy in the debt-riddled euro zone prompted the euro to tumble against the dollar on the currency index, with crude oil prices mirroring the fall. Futures of the fuel tend to flounder whenever the greenback advances on the charts, as foreign investors lose interest in the expensive commodity.

The constant pressure that the European Central Bank is feeling from Fitch Ratings is also detracting investors from crude oil. The agency’s officials have repeatedly warned the region’s heads that further inept handling of the financial crisis in the area will inevitably lead to a total collapse of the euro.

West Texas Intermediate crude oil prices for delivery in February fell 83 cents to $101.41 per barrel in electronic trading on the New York Mercantile Exchange. In London, Brent crude oil futures sank 21 cents and settled at $113.07 per barrel on the ICE Futures Exchange.

Recent crude oil price history does however possess a constant line of support in the form of the perpetually escalating tensions between Iran and the powers of the West regarding the former’s nuclear programme.  The US is currently in talks with Chinese officials with an aim to either reduce or completely ban the imports of Iranian fuel into the nation. The West is now planning to mount sanctions against any country that continues to trade with Iran.

The OPEC member’s largest markets are still in Asia, a region that has so far been unresponsive to the calls of the US.

By Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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