Oil Investments Down for Two Days Straight as Concerns Linger in the Eurozone
After rallying up the commodities market for more than ten days, and paring down most of the massive losses they sustained throughout the year’s run, crude oil futures sank sharply again in New York today, losing 2.5% worth of ground on the commodity index, and sending crude oil investments and trader hope down.
The commodity of oil treaded water for most of today’s session as mixed data poured in from the U.S. Energy and Commerce Departments, and the Federal Reserve. However, mounting and persisting fears over Europe’s inability to gain control of its rapidly spiralling debt prevailed sending both crude oil prices and crude oil investments back down the charts.
The decline of crude oil futures mirrored similar dips in the equity markets, with the global index tumbling more than 2%. The latest Beige Book report from the Fed added to the pessimism sweeping over the commodities market, as slow and insufficient growth was reported in the U.S.
The main culprit behind the fall of crude oil investments remains the lingering and worsening debt crisis afflicting Europe. The region has held several summits in order to try and stave off a recession, all without much avail. With France and Germany devising an extensive five point rescue plan however, the sector now has faint hope that after this weekend’s meeting, Europe will start its slow recovery.
Until then however, investors and economists remain worried over the rapidly deteriorating situation in Greece. The nation now seems to be on the very verge of defaulting, with Spain following close behind. If the two nations are allowed to default, the economic blowback could trigger massive chain reactions that will likely send Europe into a second recession, causing crude oil prices and crude oil investments to collapse.
As it stands now, crude oil prices sit at $85.51 per barrel in the U.S., while Brent Crude oil slid below $110 per barrel in London.