Oil prices down in Asia
[SINGAPORE] Oil fell in Asia on Monday after the anti-austerity party Syriza swept to victory in Greece's general elections, dealing a further blow to the struggling euro, analysts said.
US benchmark West Texas Intermediate (WTI) for March delivery plunged by as much as 2.7 per cent to US$44.35 (S$59.70) a barrel in New York, and Brent crude for March tumbled by up to 1.9 per cent in London.
Both contracts regained some ground and by mid-morning trade in Asia, WTI was trading at US$45.14, down 45 cents or 0.99 per cent, and Brent was at US$48.44, off 35 cents or 0.72 per cent.
"Oil prices plunged just when they opened. We believe that the initial drop was sparked by the Greek elections," said Daniel Ang, an investment analyst with Phillip Futures in Singapore.
"We even saw a glimpse of panic selling once the market opened. However, prices did rebound shortly after it dropped," he told AFP.
The victory by the Syriza Party, whose anti-austerity policies have sparked fears Greece could exit the eurozone, sent the euro plunging to fresh 11-year lows against the US dollar.
Analysts say this makes dollar-priced oil more expensive, denting demand and adding further downward pressure on oil prices.
Syriza wants to renegotiate the terms of Greece's 240-billion-euro bailout deal with the European Union and the International Monetary Fund which the party says is stifling any chance Greece has of economic recovery.
Oil has lost more than half its value since June last year when the commodity was sitting at more than US$100 a barrel due to a supply glut, boosted largely by robust US production, and weak global demand.
The Organisation of the Petroleum Exporting Countries (Opec), led by Saudi Arabia, last November decided to keep output levels despite the oversupply.
"Oil prices for the rest of the week is expected to move range-bound again," Mr Ang said.
AFP
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Energy & Commodities
Pricey coffee is here to stay as hoarding, heat hit Vietnam supply
Oil settles higher as weak US economic growth offset by supply concerns
India's Vedanta misses Q4 profit estimates on lower prices
BHP targets Anglo American in bid valuing miner at US$39 billion
China's Sinopec charts global expansion with refinery in rival India's backyard
Gold trades in tight range as market focuses on US economic data