Oil Falls to 7-Month Low on Weak Euro
Oil prices fell to a 7-month low as Egan-Jones credit ratings company downgraded Spain’s credit rating from B to Bb-. This move hurt distressed Spanish bank Bankia from another government bailout. The EUR is also being weakened by further talks of Greece leaving the EuroZone.
Oil prices closed at $90.76 on the NYMEX – down 13% this month.
Brent oil prices fell 0.4% to $106.68 per barrel on the ICE (IntercontinentalExchange’s Futures Europe exchange).
BNP Paribas reduced their 2012 targets for WTI (West Texas Intermediate) crude oil prices to $100 per barrel, and Brent oil prices to $115.
The EUR/USD fall 0.6% to 1.2461 – the lowest since July 2010. A weaker EUR makes crude oil – which is prices in USD – more expensive for people holding Euros. So as the EUR falls, crude oil becomes relatively more expensive, weakening demand for oil and driving prices down.
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