Oil Lower Despite EU Deal to Save Eurozone
Oil weakened in Asian trade Monday as investors remained cautious despite European leaders announcing a deal aimed at saving the Eurozone, analysts said.
New York's main contract, light sweet crude for January delivery, dropped 25 cents to $99.16 a barrel and Brent North Sea crude for January delivery fell 39 cents to $108.23.
Most of Europe's leaders on Friday backed tighter budget policing, with 26 of the 27 European Union states signalling willingness to join a "new fiscal compact" to resolve the crisis threatening to crack apart the monetary union.
Britain, which does not use the euro, resisted a Franco-German drive to enshrine new budget rules in a modified EU treaty.
"At the end of the day, the summit produced a couple of rules that can seemingly be fudged without end," analysts from Singapore's DBS bank said in a commentary.
"Is this then the end to the EU debt crisis? One would like to hope it’s a start but frankly the content seems weak."
Global financial markets have been roiled in recent weeks by worries over the Eurozone’s escalating debt crisis, which has engulfed members including Greece, Ireland and Portugal.
Friday's pact has led to hopes the European Central Bank will drop its reluctance to use its full arsenal against the crisis.
ECB president Mario Draghi said the summit decisions were a "very good outcome" for the Eurozone.
"President Draghi had good things to say about the summit on Friday but that seemed more like cheerleading than anything else," DBS bank analysts said in the commentary.