Oil drops below 100 dollars on high output expectation
U.S. oil price dropped below 100 dollars a barrel on Monday as investors expected OPEC would decide to raise output at its meeting later this week, Xinhua reported.
More and more investors were expecting that the Organization of Petroleum Exporting Countries (OPEC) would decide to raise output at its meeting on June 8 to help bring down the high fuel prices. But there were also expectations that Iran and Venezuela would say No to higher outputs, causing difficulties to achieve an agreement.
Meanwhile, there were growing signs that oil demand has been dampened by softer economic recovery. The United States, the world 's biggest oil consumer, suffered from high unemployment and an economic recovery slowdown. Investors became more cautious about the future oil demand.
And the dollar rebounded against the euro on Monday, as bailout for Greece remained in question. The dollar index rose about 0.3 percent, making oil more expensive for investors holding foreign currencies.
But the continuing turmoil in the Middle East and North Africa, especially in Yemen and Syria, aroused supply concerns and helped pare the crude prices' losses.
Light, sweet crude for July delivery fell 1.21 dollars, or 1.21 percent, to settle at 99.01 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for July delivery also dipped and last traded around 114 dollars a barrel.