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Oil prices remained above $94 as the picture seemed positive with efforts towards the Greece bailout. The Prime Minister George Papandreou of Greece and main opposition leader jointly agreed for the formation of an interim government to safeguard the forthcoming rescue package from the European Union. Greece is embroiled in political chaos and is within an inch of a mammoth default. This has threatened its very membership at the EU and has also sullied the international markets. The Prime Minister George Papandreou will have to step down midway from his office tenure. Any interim government formed will have no choice but to put forward the bailout package through parliament, to release Greece from its economic crisis. The European rescue package promises around $179 billion in the form of rescue loans along with support and co-operation from banks. This promising scenario has soothed investor fears in the industry that the prices on oil may come tumbling down. However, there is also concern of other such bleak news coming out of Europe. The positive belief that the EU will be able to contain the problem of Greece debt has the oil price behaving positively. Analysts however, state the Greece debt problem has already slowed down economic growth of Europe in turn the world. What’s more, Italy’s debt burden may soon seem like a repetition of the Greece debt nightmare. Unemployment still remains a major concern in both the US and the European Union. In such a case, rigid economy accompanied by high energy prices can only spell trouble. Some analysts claim that while the Greece problem has been resolved, we are already on the threshold of the Italian debt crisis. Italy’s ten year bond yields have already risen at its peak. There is already a strong sentiment for Prime Minister Silvio Berlusconi’s resignation. This will clear the way for the formation of a new government which will be better able to implement economic reforms and get the country on track. Weekly publication releases from OPEC, the International Energy Agency and the U.S. Energy Information Administration, will be better able to guide investors as to their investments in the oil industry. The pathetic economic scenario has promoted the sentiment that the oil demand will further go down. Overall the oil industry seems on the stage of recovery from the losses it suffered due to the Greece debt crisis as well Libyan war. However, no sooner has this problem been resolved that it finds itself under the threat of the Italian debt crisis. The author is an experienced writer in oil related fields, who frequently writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.
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