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Europe’s & US Debt Problems Weaken Crude Oil

January 21, 2013 at 19:48 by Vladimir Vyun

Crude oil declined today as debt issues in the European Union and the United States deterred investors from buying riskier assets, including commodities. Previously, crude reached the highest level in four months.

The problems in Europe were overshadowed by US debt talks and political clashes, but that does not mean they have gone away. Some economists think that the situation is deteriorating even after the European Central Bank has promised that the economy will step on the path of recovery this year. The European finance ministers will review the state of Greece, Spain and Cyprus tomorrow and will speak about ways to help the indebted economies.

The debt ceiling talks in the USA continue to worry traders. It is likely that some form of agreement will be reached sooner or later. But all the politicking will likely ensure that it will be later rather than sooner and some investors fear if that would not be too late.

February futures for delivery of crude oil (WTI) declined $0.09 (0.09 percent) to $95.47 per barrel as of 19:38 GMT on NYMEX today. March contract for Brent crude dropped $0.06 (0.05 percent) to $111.83 per barrel on ICE.

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