Forexpros – Crude oil futures fell in Asian trading on Monday on fears Greece may miss austerity targets and risk losing access to bailout money in a way that would open the door to default and a Greek exit from the eurozone.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD91.21 a barrel on Friday, down 0.68%, off from a session high of USD91.27 and up from an earlier session low of USD91.20.
Representatives from the European Commission, the European Central Bank and the International Monetary Fund are due to arrive in Greece to discuss the country’s steps to narrow its debt-to-GDP target to 120% by 2020.
Fears have arisen the country may have failed to meet the austerity target and risks seeing the flow of bailout money come to a halt, which could precipitate its exit from the currency zone.
German Vice Chancellor Philipp Roesler reiterated over the weekend Greece must adhere to austerity measures in exchange for bailout money.
Der Spiegel magazine reported that the International Monetary Fund is unwilling to participate in further bailout payments over Greece’s inability to meet certain debt-reduction targets, citing unnamed sources.
A halt in the flow of bailout money for Greece could result in default and exit from the currency group, which could rattle the broader European economy and crimp demand for fuels and energy.
Meanwhile in Spain, Treasury Minister Cristobal Montoro said last week the country’s recession will extend into next year, with gross domestic product falling 0.5% in 2013 instead of expanding 0.2% as originally forecast, which further pressured oil downwards.
Yields on the Spanish 10-year government note soared above the 7% threshold deemed unsustainable by the markets on fears Spain will need sovereign rescue funding.
On the ICE Futures Exchange, Brent oil futures for September delivery were down 0.46% and trading at USD106.22 a barrel, up USD15.01 from its U.S. counterpart.
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