Weakened Global Economy Drives Crude Oil Prices Below $78

Monday figures from the New York Mercantile Exchange have shown that crude oil prices fell sharply for the second consecutive day, settling the oil commodity at its one-week low. The steep decline in futures comes amid lingering concerns over the mounting debt crisis afflicting Europe, and a strengthening U.S. dollar driving foreign investors away from high-profile commodities.

Crude oil futures fell almost 2%, according to New York reports, and are currently sitting at $77.80, well below the $80 mark that has been dreaded by economists and investors for months.

The fall of oil commodity futures is also attributed to Greek officials releasing a statement today that announced that the ailing nation would not be able to meet its deficit targets for the year. This makes a default not an expectation, but a certainty.

Representatives from the European Central Bank, the U.N. and the International Monetary Fund will all meet in Athens this week to once again attempt at securing the significant bailout funds needed to pull Greece out of default territory.

These reports have caused investors to leave high-profile commodities such copper and crude oil and instead flock to the safe havens of the markets like the improved dollar.

However, the improved currency does not spell good news for crude oil futures. The oil commodity tends to weaken when the U.S. dollar thrives, as international investors are forced to turn away from the expensive dollar-priced product.

Brent crude oil prices for delivery in November also took a hit, albeit a smaller one, falling 1% and trading at $101.69 per barrel. Though Brent’s oil commodity still has the upper hand over its U.S. counterpart, forecasts for the its product took a sharp downturn this week, coming in at $100 per barrel for the year 2012, as opposed to the $130 prediction made just a few months ago.

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