Oil weakened in the Asian trade today as investors remained cautious despite backing from EU leaders for a deal aimed at saving the euro zone, analysts said.
New York’s main contract, light sweet crude for January delivery, dropped 18 cents to $99.23 a barrel and Brent North Sea crude for January delivery fell 16 cents to $108.46.
Europe’s leaders on Friday backed tighter budget policing, with 26 of the 27 EU states signalling willingness to join a “new fiscal compact” to resolve the crisis threatening to crack apart the monetary union.
Britain, which does not use the euro, resisted a Franco-German drive to enshrine new budget rules in a modified EU treaty.
“At the end of the day, the summit produced a couple of rules that can seemingly be fudged without end,” analysts from Singapore’s DBS bank said in a commentary.
“Is this then the end to the EU debt crisis? One would like to hope it’s a start but frankly the content seems weak.”
Global financial markets have been roiled in recent weeks on worries over the euro zone’s escalating debt crisis, which has engulfed members including Greece, Ireland and Portugal.
The pact has led to hopes the European Central Bank will drop its reluctance to use its full arsenal against the crisis.
The ECB president, Mr Mario Draghi, said the summit decisions were a “very good outcome” for the euro zone.
“President Draghi had good things to say about the summit on Friday but that seemed more like cheerleading than anything else,” DBS bank analysts said in the commentary.”
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.