Oil price wavers as Europe responds to S&P warning
Tuesday, December 6, 2011
NEW YORK (AP) — Oil prices are wavering after Standard & Poor’s expanded its warning about European debt to include a bailout fund for cash-strapped eurozone members.
Benchmark crude on Tuesday rose 30 cents to $101.29 per barrel in New York, while Brent crude rose 38 cents to $109.91 a barrel in London.
S&P warned on Monday that it may downgrade 15 European countries, including Germany, because of the region’s ongoing problems with massive government debts. On Tuesday the credit ratings agency added Europe’s bailout fund for countries with the worst debt, saying it could drop from S&P’s top AAA rating if other top-rated European countries are downgraded.
German Chancellor Angela Merkel downplayed S&P’s warnings. But a downgrade would make it more expensive for European nations to raise money, hampering efforts to pay down those huge debts. Many analysts predict that Europe will slide back into recession, and the concern is how far the banking crisis will spread.