Greek Debt Knocks Down Oil Prices

Posted by Wealth Wire - Monday, June 20th, 2011

By Brianna Panzica

Oil prices have hit a 4-month low.

Prices for light, sweet crude for July delivery fell to $92.80 a barrel on the New York Mercantile Exchange on Monday, the lowest since February.

Brent crude on the London ICE futures was down to $112.27.

This has caused consumer gas prices to fall to an average of $3.646 for self-serve, according to AAA.

And yet the cause of all of this is debt and economic struggles.

While it pays to be on the consumer end of things, oil producers and traders are having a hard time of it.

So is Greece.

Recent plans for loans to Greece fell through this weekend, and members of the Euro zone are waiting for the Greek government to approve strict austerity measures before giving out about $17 billions in loans.

The plans for these austerity measures are highly unpopular in the country. They would require higher taxes paired with lower wages. Yet they would also save the country large amounts of money.

It is this situation in Greece and the hold on the European loans that has initiated the drop in oil prices.

Helping to propel this even further is the current economic situations in countries such as the U.S. and China, situations that will lead to the decrease in oil demand.

Amid all of this, the euro has been slipping.

These factors weigh heavily on the global economy, and while so many countries are economically struggling, oil demand is going to decrease, forcing the prices down.

For consumers at the pump, this is momentarily good news.

But it’s falling heavily on the world’s economy.

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