Oil prices decline on easing tensions in Iran, flat US consumer spending

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Oil prices decline on easing tensions in Iran, flat US consumer spending

By Chris Kahn, The Associated Press  | January 30, 2012
NEW YORK, N.Y. - Oil prices are down on concerns that the U.S. economy could slow and worries eased about supply disruptions in the Persian Gulf.
Benchmark West Texas Intermediate crude fell by 35 cents to US$99.22 a barrel in New York midday trading Monday. Brent crude, used to price oil imported by U.S. refineries, lost 45 cents to US$111.01 a barrel in London.
Victor Shum, an energy analyst with Purvin & Gertz in Singapore, said earlier that crude prices were volatile after Germany's finance minister warned that Europe might not give Greece a fresh bailout unless it can overhaul its state and economy. Analysts fear that could re-ignite the region's debt crisis.
European leaders were meeting in Brussels on Monday to discuss austerity measures and a tentative deal reached Saturday between Greece and its private investors to avert a disastrous Greek default on its debt.
"The situation in the eurozone continues to remain gloomy without any clarification about Greek issues," said a report from Sucden Financial in London.
Supply concerns also weighed on the market although Iran has postponed plans to immediately cut the flow of crude oil to Europe in retaliation for planned EU sanctions over its nuclear program.
"This reduces the danger of an immediate supply shortage in the oil market, which also puts prices under pressure," said analysts at Commerzbank in Frankfurt.
Meanwhile, Iran also welcomed international weapons experts into the country in hopes of refuting claims that it is building a nuclear weapon. That eased concerns about possible military action in the region.
And in Washington, the Commerce Department said Americans kept a tighter grip on their wallets in December. The U.S. economy relies heavily on consumer spending and analysts say the recovery could stall, weakening energy demand, if it doesn't pick up.

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