Oil price hits lowest level in seven months | Business| Economy and finance news from a German perspective | DW | 23.05.2012
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Oil price hits lowest level in seven months

Oil prices have dropped considerably in recent days, to levels not seen for well over half a year. Analysts attribute the drop to hopes of easing tensions between Iran and the West amid fresh bilateral talks.

Oil prices dipped considerably again on Wednesday, marking a seven-month low on global markets. A barrel of standard crude oil traded for as little as $91 (71 euros) in New York, easing 88 cents on the day after prices already fell by one dollar per barrel on Tuesday.

A barrel of Brent North Sea crude traded in London shed over $1.3 to come in at a little over $107 in midday trading. Prices at the pumps have been dropping correspondingly in recent days.

Analysts say the 14-percent decrease in oil prices since the beginning of this month is a result of easing tensions between major crude exporter Iran and western nations, with multilateral talks in Baghdad on Wednesday being seen as a sign of de-escalation.

Volatile markets

"Oil has slipped on news that Iran will let UN nuclear inspectors into the country," IG Markets analyst Justin Harper told the AFP news agency.

Dealers on Wednesday were also keeping an eye on the eurozone debt crisis ahead of an informal EU summit in Brussels on growth incentives to accompany budget consolidation.

European shares tumbled, with the euro at one point hitting a 21-month low against the dollar by slumping to below $1.26. Market uncertainties prevailed after Former Greek Prime Minister Lucas Papademos had described the risk of his country dropping out of the euro area as real.

hg/ng (Reuters, AFP, dapd)