NEW YORK (AP) - To discern the direction of oil prices, look to Europe.
Oil prices wavered near $91 a barrel Monday as concerns about the Greek debt crisis waned. The market is waiting to see if Greece receives a new round of international aid.
Benchmark oil for August delivery lost 48 cents to $90.69 in midday trading on the New York Mercantile Exchange.
Oil dipped below $90 earlier on fears that the Greek debt crisis would not be resolved. Also, the Commerce Department said Monday that U.S. consumer spending was unchanged in May, the worst result since September 2009. When adjusted for inflation, spending dropped slightly.
But oil prices recovered after reports surfaced that French banks had agreed to accept slower repayment of Greece's debt, relieving some pressure on the country.
"We're going to see a lot of nervous trading over Greece until we see a resolution," said Phil Flynn, an oil analyst at PFG Best.
Greek lawmakers will vote on a $39.8 billion austerity plan Wednesday. German Finance Minister Wolfgang Schaeuble warned Sunday that Greece will not receive its next tranche of international aid unless the measure passes.
Flynn said while the consumer spending report did show weakness in the U.S. economy, traders were not surprised by the report.
"More of the focus is on Europe than it is on the U.S. right now," he said.
In London, Brent crude for August delivery fell 8 cents to $105.04 a barrel on the ICE Futures exchange.
Crude fell sharply last week after the International Energy Agency said it will make 60 million barrels available over a 30-day period, half of which will come from the U.S. Strategic Petroleum Reserve.
NEW YORK (AP) - To discern the direction of oil prices, look to Europe.
Oil prices wavered near $91 a barrel Monday as concerns about the Greek debt crisis waned. The market is waiting to see if Greece receives a new round of international aid.
Benchmark oil for August delivery lost 48 cents to $90.69 in midday trading on the New York Mercantile Exchange.
Oil dipped below $90 earlier on fears that the Greek debt crisis would not be resolved. Also, the Commerce Department said Monday that U.S. consumer spending was unchanged in May, the worst result since September 2009. When adjusted for inflation, spending dropped slightly.
But oil prices recovered after reports surfaced that French banks had agreed to accept slower repayment of Greece's debt, relieving some pressure on the country.
"We're going to see a lot of nervous trading over Greece until we see a resolution," said Phil Flynn, an oil analyst at PFG Best.
Greek lawmakers will vote on a $39.8 billion austerity plan Wednesday. German Finance Minister Wolfgang Schaeuble warned Sunday that Greece will not receive its next tranche of international aid unless the measure passes.
Flynn said while the consumer spending report did show weakness in the U.S. economy, traders were not surprised by the report.
"More of the focus is on Europe than it is on the U.S. right now," he said.
In London, Brent crude for August delivery fell 8 cents to $105.04 a barrel on the ICE Futures exchange.
Crude fell sharply last week after the International Energy Agency said it will make 60 million barrels available over a 30-day period, half of which will come from the U.S. Strategic Petroleum Reserve.
This helped extend and accelerate a decline in U.S. retail gasoline prices. The nationwide average for retail gasoline fell to $3.57 per gallon Monday according to AAA, Wright Express and the Oil Price Information Service. Prices have dropped 24 cents in a month.
This past weekend was the least expensive at the pump for drivers since March 26-27.
Still, gas is 81 cents higher than a year ago, when oil was around $78 per barrel. And some analysts said the recent decline in oil prices could be temporary.
"We doubt the world's energy supply will be solved by such a paltry sum," energy consultant Stephen Schork said in a report. "(The IEA's) move might assuage the market this summer, but it is by no means a long-term fix."
Others, however, noted that because other crude exporters like Saudi Arabia were maintaining crude output levels, supplies were likely to rise.
"The countries in the Gulf region apparently do not want to restrict production and this should mean a marked oversupply on the oil market in the coming weeks, which should push prices down further," said a commodity report from Commerzbank in Frankfurt.
Analysts also said oil prices were under pressure because speculators, seeking safer destinations for their money, have begun to back away from bets that prices will rise.
In other Nymex trading in July contracts, heating oil rose 1.2 cents to $2.7807 a gallon while gasoline fell slightly to $2.7146 a gallon. Natural gas futures rose fractionally to $4.233 per 1,000 cubic feet.
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Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.
Jonathan Fahey can be reached at twitter.com/JonathanFahey
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