SINGAPORE: Crude prices dived in Asia Monday as the euro slipped against the dollar on worries over Greece's sovereign debt repayment and the arrest of the International Monetary Fund chief.
In the afternoon, New York's main contract, light sweet crude for delivery in June, fell $1.26 to $98.39 per barrel, and Brent North Sea crude for June delivery shed 97 cents to $112.86.
The euro was down against the dollar in Asian trade as markets fretted that talks on Greece's debt crisis would be thrown into disarray by the arrest of IMF chief Dominique Strauss-Kahn.
A stronger greenback makes dollar-priced oil more expensive, leading to softer demand and lower prices.
"Lately the driver has been the value of the dollar versus the euro," said Victor Shum, senior principal of Purvin and Gertz international energy consultants in Singapore.
"The dollar is getting stronger because of the re-emergence of the European sovereign debt issue," he told AFP.
Eurozone debt concerns were highlighted Sunday by German Finance Minister Wolfgang Schaeuble, who said financially-strapped Greece could be granted an extension to its debt repayment if private creditors are also involved.
Greece's 110-billion-euro ($155 billion) rescue in spring 2010 was the first of three European rescues, followed by Ireland and Portugal, but a severe recession has complicated Athens' efforts to get its finances back in order.
Greece was expected to return to the financial markets next year but it appears unlikely and there is speculation that it will need further financial assistance.
Worries over the eurozone's debt-ridden economies were further complicated by sexual assault charges lodged against IMF chief Strauss-Kahn in the United States.
"The arrest of the IMF chief over the sexual assault charge in New York City makes the aid to Greece quite uncertain too," Shum said.
The global financial watchdog is leading the efforts to help the debt-ridden countries in the eurozone.
Strauss-Kahn's arrest forced the IMF executive board to postpone its meeting from Sunday to later Monday.
The board was to finalise an IMF-backed bailout for Portugal and discuss Greece's debt position.
Strauss-Kahn, whose stint at the IMF does not officially end until September 2012, had been due to meet with German Chancellor Angela Merkel in Berlin on Sunday to discuss an aid package for Greece.
Copyright AFP (Agence France-Presse), 2011
Comments
Comments are closed for this article.