Oil prices dip on European debt worries
Concerns over Europe's economic problems weighed on oil prices today, pushing US benchmark crude to an intraday low of US$85.62.
Futures for crude oil in London and New York were able to recoup some of their early losses later in the session after US housing data came in slightly ahead of expectations.
Oil prices fell sharply this morning on the news that Germany's GDP growth amounted to just 0.1 in the second quarter, while the first quarter estimate was revised from 1.5 percent to 1.3 percent.
The data dampened confidence in Europe's ability to tackle its fiscal problems as Germany has been a major contributor to aid packages for failing euro zone members.
Oil rebounded later in the day as the US Commerce Department reported a smaller than expected drop in housing starts in July. The data showed a 1.5 percent decline to an annualised rate of 604,000, while analysts polled by Reuters expected to see a 600,000 rate.
Traders are now waiting for the results of today's meeting between French President Nicholas Sarkozy and his German counterpart Angela Merkel.
The two euro zone leaders will try to work out a solution to Europe's fiscal problems, which, at least at this time, is highly unlikely to include the introduction of euro zone bonds.
US light, sweet crude for September delivery fell US$1.68 to US$86.20/barrel in morning trade on the New York Mercantile Exchange (NYMEX).
September Brent crude dropped US$1.28 to US$108.45/barrel on the ICE Exchange this afternoon.
Today's top risers in the sector were:
Sound Oil (LON:SOU), up 9.5 percent at 2.22 pence at midday
Green Dragon Gas (LON:GDG), up 6.5 percent at 9.32 pence
Desire Petroleum (LON:DES), up 6 percent at 20.39 pence
Fortune Oil (LON:FTO), up 5.5 percent at 11.59 pence
Sefton Resources (LON:SER), up 5 percent at 3.05 pence
The top fallers were:
Enegi Oil (LON:ENEG), down 11 percent at 10 pence at midday
Petrel Resources (LON:PET), down 11 percent at 8.25 pence
Woburn Energy (LON:WBN), down 8.5 percent at 1.6 pence
Nostra Terra Oil & Gas (LON:NTOG), down 8 percent at 0.5 pence
Europa Oil & Gas (LON:EOG), down 6.5 percent at 11.94 pence
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