Oil prices drop awaiting EU summit

An oil rig is shown in this file photo.

An oil rig is shown in this file photo.

Published Jun 28, 2012

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World oil prices dropped on Thursday, mirroring the pattern across financial markets, as traders awaited the outcome of an EU summit on the eurozone debt crisis.

Brent North Sea crude for delivery in August fell 80 cents to $92.70 a barrel approaching midday in London.

New York's main contract, light sweet crude for August, lost 31 cents to $79.90 a barrel.

EU leaders debate “a big leap forward” to strengthen their union and save the euro at a two-day summit starting Thursday, but divisions may scuttle efforts to shore up the single currency.

European Union heads of state and government gather from 3:00 pm (15:00 SA time) as the debt crisis, now in its third year, widens to Cyprus and Spain after contaminating Greece, Portugal and Ireland.

And with Italy, the third-biggest eurozone economy Italy too under threat, the EU is under pressure from world leaders to prevent a collapse of the single currency that would have unfathomable global repercussions.

Europe's leaders are expected to agree a growth pact to revive the continent's flagging economies and propel the 27-nation bloc towards greater union, the first step being a banking union.

Crude prices meanwhile rose on Wednesday even as the US stockpiles report remained largely unchanged from the level a week earlier.

A continuing labour strike by oil workers in Norway, the world's eighth-biggest exporter, supported higher prices especially in London.

More than 700 oil workers began the strike on Sunday after pension negotiations broke down. - Sapa-AFP

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