Oil markets are concerned that economic weakness in Europe could affect demand for crude
19 September 2011 Last updated at 22:06
World share markets have fallen, and oil and the euro are also down, on fresh worries about a Greek default.
The Dow Jones index closed 0.9% down, the FTSE 100 ended 2% lower, and France’s Cac and Germany’s Dax sank about 3%.
Brent crude fell $2.5 to $109.61 a barrel on concerns that a slowing world economy will cut demand for oil.
The falls came after a weekend meeting of European officials ended without a deal on ways to tackle the debt crisis.
“The market is bracing itself for the worst possible outcome, which is a disorderly Greek default,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London.
In addition to Brent’s fall, US crude was down $2.34 to $85.62 a barrel.
Oil analyst Jonathan Barratt of Commodity Broking Services said the eurozone concern was hitting demand.
“Look at what’s happening in Europe. People are beginning to see that it is taking a lot longer than anticipated to resolve the issue,” he said.
“Longer uncertainty means the demand outlook for oil remains weak.”
On Sunday, Greek Prime Minister George Papandreou chaired cabinet crisis talks, a day after cancelling a trip to the US amid growing fears over the debt crisis in the country.
The talks focused on new austerity measures to enable Greece to secure the country’s next bailout loan.
Without the next loan Greece will not be able to meet its debt payments next month.