Oil down in Asian trade

SINGAPORE: Oil was lower in Asian trade Monday on continuing fears over Greece's debt crisis and concerns over the US economy, analysts said.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for July delivery, fell 69 cents to $92.32 a barrel.

Brent North Sea crude for delivery in August fell 70 cents to $112.51.

"Oil prices continue to be worn down by pressures concerning the Greek debt crisis, which is affecting markets globally," said Victor Shum, an analyst with Purvin and Gertz international energy consultancy in Singapore.

On Sunday, European finance chiefs launched crunch talks to avert the default of debt-stricken Greece amid fears of a domino effect rippling across the eurozone.

The finance ministers said they and the International Monetary Fund (IMF) would release 12 billion euros of loans in "mid-July" on condition that Greece adopted tough budget cuts and asset sales.

Markets are worried that a default on Greek debt could trigger a cascade of problems in Europe's bigger economies and spark another global financial crisis.

"Another primary concern is over the US economic outlook," Shum added.

The IMF has joined calls for the US Congress to raise the country's debt limit, warning failure to act could provoke a major global market upheaval.

The US government hit its legal borrowing limit of $14.29 trillion on May 16, forcing the Treasury to take extraordinary technical measures to avert a debt default. That room for manoeuvre is expected to run out on August 2.

The issue of raising the debt limit is bogged down in Congress, where President Barack Obama's Democrats are at loggerheads with Republicans, who control the House of Representatives.

Copyright AFP (Agence France-Presse), 2011