The financial crisis in Europe is sending oil prices back to where they were four months ago. Amid Europe?s debt crisis; oil prices fell from a three day high yesterday. The American Petroleum Institute said, US crude stockpiles fell by 3.01 million barrels last week.
Concerns about Europe’s economy also rippled through the Wall Street. Stock markets in the US gave back all of the gains they made. “The debt situation in Greece is coming into focus again so people are hesitant to buy,” said Gerrit Zambo , a trader at Bayerische Landesbank in Munich. “The supply situation everywhere is quite relaxed, especially in the US.”
Riots broke out in Greece on Wednesday over proposed austerity measures as the government struggles with a simmering debt crisis. Moody’s ratings service said it may downgrade three big French banks that face losses on Greek bonds. The euro lost 2% against the dollar on Wednesday. Oil tends to fall as the dollar rises because oil is priced in dollars and becomes more expensive for investors holding foreign currencies as the dollar gets stronger.