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Oil near $97 amid debt crisis, US economy jitters

Oil near $97 amid debt crisis, US economy jitters

July 18th, 2011 by ALEX KENNEDY, Associated Press in News

SINGAPORE (AP) - Oil prices hovered near $97 a barrel Monday in Asia as weakening U.S. consumer confidence and more signs of financial stress in Europe kept a lid on buying appetite.

Benchmark oil for August delivery was down 7 cents to $97.17 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose $1.55 to settle at $97.24 on Friday.

In London, Brent crude fell 31 cents to $116.95 per barrel on the ICE Futures exchange.

On Friday, 8 of 90 European banks flunked stress tests designed to gauge how they would fare in another recession, and 16 more barely passed. Investors in Europe have been rattled by concern Greece's debt crisis could spread to other EU countries and further undermine already weak economic growth.

Traders are also eyeing the U.S., where lawmakers have yet to agree on government spending two weeks from a deadline about raising the debt ceiling. Ratings agencies have put the U.S. credit rating on downgrade watch as a result.

Consumer confidence fell in July to its lowest in more than two years, according to a Thomson Reuters/University of Michigan survey released Friday.

"The economic headlines of the last several months have been less than encouraging, especially when it comes to our homes and our jobs," energy consultant The Schork Group said in a report. "So it comes as little surprise that confidence among consumers is now back at levels last seen during the Great Recession."