Oil slips to $97 as recovery weakens

Oil prices slipped to $97 (Dh356) a barrel Tuesday on concern a weakening global economy is undermining crude demand. By early afternoon in Europe, benchmark oil for July delivery was down 29 cents to $97.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.99 to settle at $97.30 on Monday following a fall of $2.64 on Friday. On Monday, Standard & Poor's cut Greece's credit rating deeper into junk territory Monday, saying the country is likely to default on its massive debts at least once by 2013. Investors are worried a disorderly restructuring of Greek debt could spark panic in the global bond market and torpedo a fragile global recovery. "Greece continues to be a dark hole into which hopes for economic recovery get lost," energy consultant Cameron Hanover said in a report. "At the heart of the [oil price] weakness was the continuing fear that the global recovery may be losing steam and traction." "Almost every day, there is some fresh economic data that seems to fit better in an anemic recovery than in one that is robust or dynamic." China said yesterday that its inflation rate rose to 5.5 per cent in May, the highest in nearly three years, while industrial production last month jumped 13.3 per cent. From / Gulf News