Oil near $92 as faith in Europe debt plan fades

[November 01, 2011]  SINGAPORE (AP) -- Oil prices fell to near $92 a barrel Tuesday in Asia as the initial optimism about Europe's plan to resolve its debt crisis faded.

Benchmark crude for December delivery was down $1.07 at $92.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract slipped 13 cents to settle at $93.19 in New York on Monday.

Brent crude was down 29 cents at $109.27 a barrel on the ICE Futures Exchange in London.

Crude has jumped from $75 on October 4 amid expectations of a European plan to contain Greece's debt crisis.

Last week, EU policymakers agreed to lower Greece's debt level over the next decade and also asked bondholders to accept 50 percent losses on their Greek debt, sending stocks and commodities higher. But the plan lacked key details and investors are worried weak economic growth in Europe could undermine fiscal and debt targets.

"Last week's initial market response to the eurozone plan appeared outsized in relation to the limited details that accompanied the announcement and as a result, the markets are retracing much of last week's price up spike," energy consultant Ritterbusch and Associates said in a report.

Traders were also spooked by the bankruptcy of MF Global, a securities firm headed by former New Jersey Gov. Jon Corzine. Rating agencies downgraded the company last week, worried that it holds too much European debt.

In other Nymex trading, heating oil fell 2.3 cents to $3.04 per gallon and gasoline futures slid 2.2 cents to $2.58 per gallon. Natural gas gained 0.5 cent to $3.94 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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