Crude Oil Price Update-Futures Fall on Concerns Over Greece’s Debt, US Economy

Oil futures declined on concerns about a sluggish recovery of the US economy and Greece’s debt crisis. WTI crude futures fell by 0.94 percent to USD $ 99.16 a barrel. Brent futures fell by 0.73 percent to USD $ 111.57 a barrel.

Hedge funds reduced bullish bets on oil on account of the US Dollar appreciating. Appreciation of the Dollar leads to a decline in the price of all commodities. Futures also declined after the main indicators of the US economy declined in April after increasing for nine months. The number of homes sold declined in April, along with manufacturing in the Philadelphia sector increasing by the lowest amount in May in seven months. All of these signs hint towards a sluggish US economy and a reduced demand of oil.

The rating agency Fitch downgraded Greece’s credit rating to B+ from BB+, four grades below the acceptable investment grade. Also, Greece’s government bond yields rose to ten year highs as there was a growing feeling that the country would fail to restructure its debt.