Oil prices fell further today as traders assessed the impact of Europe’s debt nightmare on the outlook for energy demand.
Equities and commodities around the globe fell sharply today after euro zone finance ministers decided to postpone decision on releasing the next €8 billion payout for Greece until mid November even though Greece has previously said it would run out of cash by mid October.
The debt ridden Greece said on Sunday that it would miss its budget deficit targets this and next year, reigniting fears that the country may fail to comply with the terms of its latest bailout deal and go into a debt default.
Besides fears that the debt crisis will spread throughout the euro zone and trigger a financial meltdown, oil prices were pressured by a bearish note from Goldman Sachs.
The investment bank has decided to reduce its Brent crude price forecast for 2012 from US$130 to US$120 per barrel, citing the negative impact of Europe’s economic woes on demand for commodities.
Goldman also warned that it expects Europe to go into a mild recession, while reducing its 2012 forecast for global economic growth from 4.2 percent to 3.5 percent.
US light, sweet crude for November delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), fell US$1.69 to US$75.92/barrel in morning trade in New York.
November Brent crude dipped US$1.88 to US$99.83/barrel on the ICE Exchange this afternoon.
Today’s top fallers in the oil and gas sector were:
Gasol (LON:GAS), down 16.5 percent at 0.5 pence at midday
Tower Resources (LON:TRP), down 14.5 percent at 3.1 pence
Enegi Oil (LON:ENEG), down 13 percent at 8.06 pence
Argos Resources (LON:ARG), down 12 percent at 20.4 pence
Oilex (LON:OEX), down 11.5 percent at 12.25 pence