Crude falls on lack of action from European Central Bank

02 August 2012 15:37  [Source: ICIS news]

LONDON (ICIS)--NYMEX light-sweet crude oil futures fell by almost $2.00/bbl on Thursday after the European Central Bank failed to live up to promises to intervene in the eurozone debt crisis.

By 13:30 GMT, the front-month September NYMEX WTI contract had touched an intra-day low at $87.09/bbl, a loss of $1.82/bbl compared to Wednesday’s settlement. The contract then edged a little higher to trade around $87.20/bbl.

At the same time, September ICE Brent crude oil futures were trading around $105.25/bbl, having touched an intra-day low at $104.97/bbl, a loss of 99 cents/bbl compared to the previous close.

The President of the European Central Bank (ECB), Mario Draghi, signalled that the bank is ready to intervene in sovereign bond markets to lower borrowing costs for some weaker eurozone economies.

However, the ECB’s key lending rate was left unchanged at 0.75%. Additionally Draghi made clear that troubled eurozone governments need to apply for the eurozone funds and accept strict conditions to receive funding.

Draghi pledged last week in a conference in London that the ECB is ready to do whatever it takes to preserve the euro.

By: Kawai Wong
+44 20 8652 3214

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