Oil prices drop ahead of crucial EU summit

AFP, Thursday 28 Jun 2012

Oil prices fall as traders await the outcome of a key meeting Thursday on the Eurozone debt crisis

World oil prices dropped Thursday, mirroring a pattern across financial markets, as traders awaited the outcome of a EU summit on the Eurozone debt crisis.

Brent North Sea crude for delivery in August fell 80 cents to $92.70 a barrel approaching midday in London.

New York's main contract, light sweet crude for August, lost 31 cents to $79.90 a barrel.

EU leaders debate "a big leap forward" to strengthen their union and save the Euro at a two-day summit starting Thursday, but divisions may scuttle efforts to shore up the single currency.

European Union heads of state and government gather from 3:00pm (1300 GMT) as the debt crisis, now in its third year, widens to Cyprus and Spain after ravaging Greece, Portugal and Ireland.

With Italy, the third-biggest Eurozone economy, too under threat, the EU is under pressure from world leaders to prevent a collapse of the single currency that would have unfathomable global repercussions.

Europe's leaders are expected to agree a growth pact to revive the continent's flagging economies and propel the 27-nation bloc towards greater union, the first step being a banking union.

Crude prices, meanwhile, rose Wednesday even as the US stockpiles report remained largely unchanged from the level a week earlier.

A continuing labour strike by oil workers in Norway, the world's eighth-biggest exporter, supported higher prices, especially in London.

More than 700 oil workers began the strike Sunday after pension negotiations broke down.

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