Crude
prices sank in Asia on Monday as eurozone debt fears were compounded by
disunity within the European Central Bank even as Greece announced a new plan
to cut its deficit, analysts said.
New York's main contract, light sweet crude for delivery in
October, dived $1.71 to $85.53 per barrel in the afternoon.
Brent North Sea crude for October delivery fell $1.17 to
$111.60.
All eyes were on Europe's debt crisis yet again as Athens
unveiled a fresh round of budget cuts in a renewed bid to stave off a debt
default that traders fear could bring the region's banks to their knees.
"What's causing the fall is fear about the eurozone debt
issue, fear about Greece going into default, hence pulling European banks into
a collapse like the Lehman situation," said Victor Shum, senior principal
of Purvin and Gertz energy consultants in Singapore.
"That's the fear driving the markets, it's all eurozone
debt related," he told AFP.
Wall Street titan Lehman Brothers was forced to declare
itself bankrupt in 2008 after its risky bets on the US housing market turned
bad, precipitating the global financial crisis that which ravaged economies
worldwide.
Greece on Sunday announced a two-billion-euro plan to fight
its huge deficit, but traders were disheartened by disharmony within the
European Central Bank as it struggled to enact measures to prevent a Greek
default.
Germany's main representative on the ECB executive board and
the bank's chief economist Juergen Stark on Friday announced his resignation
"for personal reasons" well before the end of his term of office in
May 2014.
Coming in the middle of an increasingly vocal spat between
the ECB and the continent's most powerful economy, Germany, Stark's exit
heightened worries that the European Union will not come together to prevent a
Greek default or weakening of the eurozone.
German Economy Minister Philipp Roesler said in a column to
be published Monday that Europe could no longer rule out an "orderly
default" for Greece.
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Source : AFP
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