Oil lowest price since 2009 as Russia Boosts Production and Euro lowest since 2005 on new Greece Crisis Fears

Oil dropped to the lowest in more than five and a half years amid growing supply from Russia and Iraq and signs of manufacturing weakness in Europe and China.

John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “The Chinese and European PMI figures signal weaker demand, while there’s ever-increasing supply. Nobody is cutting back on output and now the Russians are posting post-Soviet production highs.”

West Texas Intermediate for February delivery fell 58 cents, or 1.1 percent, to $52.69 below $50 a barrel on the New York Mercantile Exchange, the lowest close since April 30, 2009. Brent for February settlement dropped 91 cents, or 1.6 percent, to close at $56.42 a barrel on the London-based ICE Futures Europe. It’s the lowest settlement since April 30, 2009.

The euro tumbled to its lowest level against the dollar (US$1.18 = 1 Euro) in nearly nine years on Sunday night amid mounting fears that Greece could exit the eurozone.

The sharp slide came as Asian markets accelerated a sell-off sparked on Friday, when Mario Draghi gave his strongest hint ever that the European Central Bank was ready to launch quantitative easing to tackle the threat of deflation.

Fears in Europe are growing that a lurch to the left in Greece could bring about a dramatic shift in the government’s attitude towards its creditors.

Georg Streiter, a spokesman for Mrs Merkel, refused to comment on reports that she believes the eurozone is now robust enough to cope with the potential exit of Greece should the looming general election in Greece reignite the eurozone crisis.

Greece’s economy remains nearly 25% smaller than it was in 2008, and has the highest debt mountain in the euro-area. The country’s unemployment rate is currently 25.6%

SOURCES -Bloomberg, UK Telegraph

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