Oil Price Drops To One-Week Low in New York
Good news: the price of oil has reached its lowest level in a week, mostly because today’s concern about Italy which will apparently become another victim of the debt crisis.
The rising concerns have allowed the dollar to gain some terrain in front of the euro while the low level of Chinese imports has also helped. The price of oil has decreased by 2 percent the second it was announced that the euro-zone finance ministers are gathering and plan to discuss the debt issues of Italy. Almost instantly the euro recorded a six-week low in the competition with the American dollar. Considering that Chinese imports have decreased by 10 percent and the unemployment level has registered a record value in the USA, many are afraid that the demand for fuel will also decrease in the world’s largest consumers of oil.
Tom Bentz, a broker from New York declared that “there’s some pressure on oil from concerns in the euro zone”, mostly because “the euro got hit pretty hard” due to the factors explained above.
The price for crude oil decreased by 0.5 percent to $95.70 a barrel. This value concerns the August deliveries and was reported at 10:05 a.m. on the New York Mercantile Exchange. The lowest value recorded since July 1 was of $94.32. Only in the last year, prices have gone up by 26 percent. Those percentages have definitely made a difference in our pockets.
A euro is now worth $1.399 after it dropped 1.9 percent and earlier in the day it reached $1.3987, the lowest value since May 23. This situation is reducing the appeal of commodities that have started to seem for many as an exiting alternative to investments in US currency.
The US and China are the world’s biggest consumers of oil, but in June China’s net oil imports decreased by 10 percent while America had to face the highest unemployment rate registered this year: 9.2 percent. Apparently these factors along with the crisis that has been affecting the euro-zone for a while are making the price of oil drop. Good news or not, only the future will be able to help us decide.11