Oil extends losses in Asian trade

SINGAPORE: Oil fell in Asian trade Monday on lingering fears of a financial default by debt-ridden Greece and the International Energy Agency's move to release emergency reserves, analysts said.

New York's main contract, West Texas Intermediate for delivery in August, fell 65 cents to $90.51 a barrel in morning trade continuing the fall sparked by the IEA's announcement last week.

Brent North Sea crude for August declined 67 cents to $104.45, an extension of the $2.13 dip seen Friday.

Ker Chung Yang, an analyst with Phillip Futures in Singapore, said investors remained concerned over the possible fallout from Greece's debt crisis, with the IEA's decision to tap into its emergency reserves also a key influence on prices.

The IEA provoked a massive sell-off after announcing it would release 60 million barrels of crude oil from strategic oil stocks over the next month to make up for lost supplies from Libya.

"Crude oil prices will stay volatile as the greater concern is still on Greece and the overall recovery of the US economy," Ker said.

Adding to disquiet over Greece's mounting debt problems were comments from Austrian Chancellor Werner Faymann, who warned in an interview Sunday: "A Greek debt default cannot be ruled out."

Greece faces a momentous battle in parliament this week to quash dissent over additional austerity reforms needed to secure a vital new bailout from the European Union and the International Monetary Fund.

Meanwhile, the country's influential unions have called a 48-hour walkout from Tuesday. That will come on top of rolling power cuts that have hit households across the country for the last week in action by disgruntled power workers.

A default by Greece risks a contagion effect across the rest of Europe which could affect global financial stability, analysts have said.

Copyright AFP (Agence France-Presse), 2011