Oil prices down in Asian trade

SINGAPORE – World oil prices extended losses Tuesday amid market volatility after a US brokerage firm filed for bankruptcy and Greece called for a referendum on its latest bailout deal.

New York’s main contract, light sweet crude for delivery in December, was down 44 cents to $92.75 in morning Asian trade, while Brent North Sea crude for December settlement dropped 26 cents to $109.30.

US brokerage MF Global’s move to file for bankruptcy protection and Greece’s call for a referendum on the EU deal have stoked new fears over the eurozone debt crisis, weighing down market sentiment, analysts said.

Confidence in MF Global was shattered by a string of losses from European public debt holdings. Its bankruptcy filing makes it the first major US casualty of the eurozone debt crisis.

A stronger greenback was also dampening demand for dollar-priced crude which becomes more expensive for holders of other currencies, analysts said.

DBS Bank said markets are “questioning the credibility of last week’s comprehensive package to stabilize the (eurozone) sovereign debt crisis”.

“Neither did it help that MF Global went bankrupt, with the Greek government calling for a referendum on the second bailout at the same time,” it added in a market commentary.

DBS said G20 countries would have to “work harder” to demonstrate their cooperation and to “keep October’s growth optimism from slipping back into downside growth worries in November again.”

Leaders of the Group of 20 developed and developing nations are to meet this week in French city of Cannes, with the eurozone crisis expected to be a key agenda item.

The oil market had rallied last week after a breakthrough eurozone sovereign debt crisis deal helped ease stubborn concerns that problems in Europe could spark a new global recession.

But there are signs the euphoria could be waning as governments grapple with the details of implementing the plan.