Forex Pros – Crude oil futures fell sharply on Monday, declining for the first time in three days, as ongoing concerns over a slowdown in global oil demand weighed on prices.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD98.08 a barrel during European morning trade, tumbling 1.35%.
It earlier fell by as much as 1.5% to a daily low of USD97.88 a barrel.
President Barack Obama warned on Sunday that a failure to raise the U.S. debt ceiling could disrupt the global financial system and threaten growth in the world’s largest crude consumer.
In a televised interview on the “Face the Nation” program aired on CBS Sunday night, President Obama warned that “the entire financial system could unravel” and that the U.S. “could have a worse recession than we’ve already had”, if Republican and Democratic lawmakers failed to raise the debt ceiling in time.
The U.S. Treasury Department projected earlier this month that the government was expected to reach the USD14.3 trillion debt-ceiling limit as soon as mid-May and run out of options for avoiding default by early July.
Prices also slid on concern Greece’s debt crisis may worsen after the arrest of International Monetary Fund chief Dominique Strauss-Kahn for sexual assault over the weekend added to uncertainty surrounding a bailout for the debt-stricken nation.
Meanwhile, global financial service provider Bank of America-Merrill Lynch said in a report published Sunday that it expected oil prices to “head lower” in the July-to-December period amid signs of demand destruction, especially in the U.S.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery dropped 1.09% to trade at USD112.11 a barrel, up USD14.03 on its U.S. counterpart.
Bank of America said it expected Brent prices to average USD94.00 a barrel in the fourth quarter.
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