Crude falls in Asia on strong dollar as G20 meets

SINGAPORE – Oil prices tumbled in Asian trade Thursday, dragged down by a surging greenback and worries over a European debt rescue plan jeopardised by Greece’s decision to hold a referendum, analysts said.

New York’s main contract, light sweet crude for delivery in December, fell 72 cents to $91.79 per barrel.

Brent North Sea crude for December delivery dipped 13 cents to $109.21.

A strengthening greenback weighed on crude markets already bogged down by Greece’s decision to hold a referendum on a newly-minted eurozone deal, said Sanjeev Gupta, head of Ernst & Young’s Asia-Pacific oil and gas practice.

“Global benchmark crude prices weakened on the heels of a strengthening US dollar, a weakening euro, increasing doubts about the workability of the euro-zone debt banking deal, and concerns that the deal would be undermined by Greek voters,” he told AFP.

The euro tumbled against the greenback early Thursday, trading at $1.3680 from $1.3746 in late US trade Wednesday. A strengthening US dollar would make crude more expensive to traders using other currencies, dampening demand.

Crude as well as equities markets had been clobbered by Greek Prime Minister George Papandreou’s shock announcement Tuesday that Athens would seek a referendum on an eurozone debt rescue deal hammered out barely a week ago.

The move placed the fate of the deal in serious jeopardy, and earned the ire of European leaders as the global economy yet again faced the threat of being dragged into a renewed recession.

Papandreou on Thursday said Greece’s referendum could be held as early as December 4.

Crude markets were keenly awaiting a Group of 20 summit in the French resort of Cannes, where the leaders of the world’s most powerful economies were attempting to strong-arm Greece into abiding by the terms of the rescue deal.

European leaders issued Greece with an ultimatum on the eve of the meeting that Athens would not get “one more cent” from the European Union and International Monetary Fund (IMF) unless Athens accepted the deal.