Oil near $79 as Europe debt crisis moves awaited

BANGKOK (AP) — Oil prices fell below $79 a barrel Monday in Asia as markets awaited Europe’s next moves to tackle a prolonged debt crisis that threatens to drag the continent into recession.

Benchmark oil for November delivery was down $1.12 to $78.75 at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. Crude fell 66 cents to finish at $79.85 per barrel on the Nymex on Friday.

In London, Brent crude for November delivery was down 59 cents at $103.38 on the ICE Futures exchange.

U.S. Treasury Secretary Timothy Geithner told his European colleagues Saturday at the annual meeting of the International Monetary Fund that Europe’s governments must join with the European Central Bank to solve Greece’s debt crisis once and for all.

Greece is at risk of defaulting on its massive debts if it doesn’t meet austerity targets that are a requirement of receiving the next tranche of loans in an international bailout. An uncontrolled default would ricochet through the financial system as European banks are big holders of Greek government debt.

The IMF, which sets policy for the 187-nation financial institution, ended its discussions Saturday with a pledge to work decisively and in a coordinated way to deal with Europe’s massive debts. The IMF pledge was similar to one made Thursday by the finance ministers of the Group of 20 major economies.

The talk appeared to calm stock and commodity markets. European stock markets and U.S. futures were higher in early trading Monday. But Asian stocks fell sharply.

“There is some hope that the European nations will be able to boost measures to inject more funds into the rescue package for the eurozone to resolve the sovereign debt crisis,” said Victor Shum, energy analyst at consultancy Purvin & Gertz in Singapore.

In other Nymex trading for November contracts, heating oil fell 1 cent to $2.79 per gallon and gasoline futures dropped 0.9 cents to $2.52 per gallon. Natural gas for November delivery rose 2 cents to $3.71 per 1,000 cubic feet.

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