Oil Prices Tank On Word Of No “Grexit”
NEW YORK, July 13 (UPI) — Major crude oil indices started trading Monday off more than 1 percent after a last-minute save for Greece and emerging prospects for an Iranian nuclear deal.
“There will not be a ‘Grexit,'” European Commission President Jean-Claude Juncker said after negotiators wrapped up a marathon negotiating session to help right the Greek economic ship.
A troubled Greek economy was in part behind factors pushing the European economy into recession during the last global financial crisis. European leaders had said the situation was less risky this time around, as the regional economy continues to show steady growth potential.
In exchange for a pledge of reforms, Greece secured a $39 billion support package,which Juncker said would stimulate economic growth and strengthen the Greek labor market.
Brent crude oil prices fell 1.8 percent in early Monday trading to $57.70 per barrel, down more than 8 percent from July 1. West Texas Intermediate, the U.S. benchmark, wasdown 1.2 percent to $52.11 per barrel, off more than 12 percent from the start of the month.
Crude oil prices are dropping off as oil supplies outweigh demand. The Organization of Petroleum Exporting Countries said it expected demand for its crude oil to drop off, though production from Saudi Arabia, the biggest contributor, reached a level not seen since the 1980s.
OPEC said demand from China, whose stock market crashed last week, should decline along with its economy. Chinese economic growth is expected to slow from 6.9 percent in 2015 to 6.5 percent next year.
More oil could come to the international market if negotiators in Vienna sign off on a final nuclear package with Iran. Any deal could release the sanctions leash from Iran, which is limited to about half of its oil export potential.
Iranian President Hassan Rouhani plans a late Monday address to the people in what could be an announcement on a breakthrough in Vienna. Hossein Hashemi, the governor general of Tehran, said preparations were under way for street celebrations.
“We support public jubilation for success of the nuclear negotiators,” he said Monday.
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