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Crude Below $80 for Third Session Ahead of EU Summit

June 25, 2012 at 20:24 by Vladimir Vyun

Crude oil traded below the $80 level for the third session today on concerns about the European credit issues. European leaders meet at a summit later this week, but investors are skeptical about their ability to reach a conclusive agreement. George Soros said that an inability of European Union chiefs to devise a meaningful plan may lead to disintegration of the euro.

Tim Evans, an energy analyst at Citi Futures Perspective, said:

We’re focused on Europe’s economic outlook. The movement in oil matches what’s happening with the equity market and the euro is soft. This is all consistent with a broad risk-off trade.

Europe was not the only reason for concerns. Citigroup lowered its forecast for China’s economic growth in 2011 to 7.8 percent down from the earlier estimate of 8.1 percent.

Traders were not pleased by today’s news. The Standard & Poor’s 500 Index slumped 1.4 percent. The Dow Jones Industrial Average slid 1 percent.

August futures for delivery of crude oil dropped $0.55 to at $79.21 per barrel on NYMEX. Brent fell from $91.65 to $89.60 per barrel before rebounding to $91.40 on ICE as of 20:14 GMT today.

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