Greece’s Intention to Hold a Referendum on The Rescue Plan Leads to a Sharp Fall in Oil Prices
by In response to a Greek plan to hold a referendum on his plan to rescue the world on Tuesday sharply falling oil prices, the growing tensions in the euro zone debt crisis threatens to reduce the demand for crude oil.
Oil markets also negatively affected by weak data on production in China, the world’s largest energy consuming countries.
New York light crude oil price for December delivery fell 2.36 U.S. cents – up to 90.83 U.S. dollars a barrel. However, the "Brent" crude oil price fell by 1.84 dollars – up to 107.72 U.S. dollars a barrel.
Oil prices suffered a severe downturn, with the sharp downturn in stock markets and the euro fell as dealers feared a possible Greek uncontrolled bankruptcy, which can cause enlargement of the debt crisis and lead to a new global recession.
Negativity oil market was augmented by news that a victim of the euro zone debt crisis has been made for the U.S. brokerage “MF Global”, which was exploding sapirkusies euro zone government bonds. This company’s collapse recalled in late 2008, when the bankruptcy of U.S. investment giant “Lehman Brothers”, causing turmoil in the global financial system.
In addition, a range of grim news added that the Italian 10-year bond yields on Tuesday risen to 6.3%, because there is concern that Italy could become the euro zone debt crisis victims.
“The Italian bond yields rise, it is clear proof that the recent euro zone rescue package, the investor would not be appropriate. The situation is aggravated by” MF Global “bankruptcy, recalling the” Lehman Brothers “, while” MF Global “is a much smaller size of the company , “commented the Swedish bank SEB analyst Bjarne Šīldrops.
Greek Prime Minister George Papandreou on Monday called for a referendum on last week’s European Union summit adopted an agreement on the Greek rescue. These data led to shock the markets, creating doubt as to whether an agreement will be implemented as multiplies the likelihood that Greece will experience uncontrolled bankruptcy, if the referendum votes against the Greeks adopted by the summit agreement.
Papandreou plan may also lead to broader impacts, causing chaos in the euro zone’s efforts to stop the spread of the debt crisis and pārsviešanos the larger countries, including Italy. “There is a risk that if the referendum Greeks tell you no, rescue efforts will suffer a complete fiasco,” said a stockbroker in Paris.
In addition, the referendum, the details were not notified, it is not expected until early next year, and this means that the uncertainty about the future of the euro area will continue this and next month.
Euro zone summit in Brussels October 27, at night an agreement was reached with the banks – the Greek government bond holders that they write off 50% from the Greek debt to them. Consequently, more than 350 billion euros (246 billion dollars) a large Greek government debt will decrease by about 100 billion euros (70 billion lats).
“Do they [the Greeks] want to accept the new agreement, or reject it? If the Greek people do not want, it will not be accepted,” Papandreou said the following in response to last week’s protests against his government’s austerity measures.
Liked it
