Oil investments sink as euro zone attempts to tackle debt crisis
Crude oil prices took a sharp fall on the commodities market today, as the oil futures failed to breach the resistant $100 per barrel mark despite coming extremely close late in yesterday’s session. Oil investments were weighed down by the persisting worries traders have expressed over the sluggish way with which European leaders have been implementing their recent debt deal. As the region’s weaker economies begin to display recession-like behaviour, many economist and investors have deemed the response of the euro zone as woefully inadequate and one that will not be able to keep Europe’s financial state from collapsing.
West Texas Intermediate crude oil futures for delivery in December slid more than 80 cents and ended the day at $98.16 per barrel in electronic trading on the New York Mercantile Exchange. Oil investments in the American benchmark soared over the past six weeks, causing the commodity oil to surge more than 30% on the market, lifting from a dismal $75 per barrel at the start of October on the strength of improving economies in the U.S. and Asia and progress made in Europe regarding the region’s rapidly spiralling debt crisis. However, investor enthusiasm in the ability of the euro zone to gain control of its financial woes has receded drastically, as both Greece and Italy are teetering on the verge of total collapse.
Italy’s bond yields are now higher than any nation in the region has displayed, and investments are suffering as a result. These developments have left many savers struggling to find out how to invest their capital in a way that protects their wealth.
Though the sector has seen some of its damages be curbed by optimistic reports stemming from China and Japan, Asia’s largest crude oil consumers; it is the situation in Europe and its eventual outcome that will eventually determine the long term path that crude oil prices and oil investments will take on the commodity index.