Opalesque Industry Update - Oil prices are hovering below $80 this week as pressure is mounting against the euro from speculators and hedge funds, various media reports said.|
Oil prices dropped 1.2% in New York on Monday as the dollar advanced against the euro after a top European Union official told Greece to meet its deficit target this year, Bloomberg.com reported. As of 11:05am Singapore time on Tuesday, crude oil for April delivery was at $78.80 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange. The contract fell 96 cents to $78.70 on Monday. Futures were down 0.7% this year.
Last week, crude oil broke through the $80 a barrel but kept falling back as big hedge funds bet against the euro. The fiscal drama in Greece added burden against the euro even after U.S. Federal Reserve chairman Ben Bernanke disclosed that the U.S. would retain its low interest rate, Posterous.com reported. Fears on the Greek economy only pushed the euro down compared to the U.S. dollar, thus affecting crude prices.
Soros bets against the euro
Previously, Soros warned that the euro could fall apart even if the European Union forges a bailout deal for the bankrupt Greek economy. Soros was quoted as saying: “Makeshift assistance should be enough for Greece, but that leaves Spain, Italy, Portugal and Ireland. Together they constitute too large of a portion of euroland to be helped in this way.”
Hedge funds heavyweights conspiring against euro
Euro plunged in value
The euro traded at $1.51 in December, but has since fallen to $1.34.
However, the Royal Bank of Scotland Plc (RBS) expressed confidence on Monday that the euro would rise to $1.40 as European officials work on a rescue package for Greece, easing concern of “default and contagion.” Greg Gibbs, a currency strategist at RBS, said that the 16-nation currency is also poised to advance after futures traders placed a record amount of bets that it will weaken, paving the way for a reversal of sentiment.