Oil Down 2% On Greek Worries, Weaker Products Markets
Euro zone leaders will hold an emergency summit on Monday to try and throw a lifeline to Athens. While the crisis has affected equity and treasury markets more than oil, the dollar's resultant rise has made commodities denominated in the greenback costlier for users of currencies like the euro.
Greece's neighbours, meanwhile, are expected to contribute to much of euro zone oil demand this year, and "if there was a Greek default and a contagion of a risk premium to other southern European countries, it could have a negative impact on European oil demand," said Olivier Jakob at Petromatrix in Zug, Switzerland.
Profit-taking in oil products also weighed on crude, said Donald Morton, who runs an energy trading desk at Herbert J. Sims & Co in Fairfield, Connecticut.
"The gasoline crack is still very high," Morton said, referring to the profit refiners obtain for "cracking" the motor fuel out of crude. "There is still a large speculator position in my opinion in gasoline."
The gasoline crack stood at above $26 a barrel on Friday, off Wednesday's 3-month high above $30 <CL-RB1=R> hit in anticipation of peak summer driving demand. For heating oil, or diesel, the crack <CL-HO1=R> was above $19, a level broadly sustained this month.
(Additional reporting by Alex Lawler in London and Meeyoung Cho in Seoul; Editing by Meredith Mazzilli and Diane Craft)
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