“Oil declined in London for the first time in five days amid speculation that the European Union’s economy will fail to grow, as the region’s leaders gathered in Brussels for a two-day summit.
Brent crude fell as much as 1.2 percent as the EU continued to battle the financial crisis that claimed Cyprus this week as its fifth victim. Economic confidence in the euro area slumped to the lowest in more than 2 1/2 years in June, the European Commission said. Germany reported that unemployment in the region’s biggest economy rose for a fourth month this year.
“The oil price is a reflection of the market’s expectation that there will be no growth in Europe for the next few years,” said Michael Hewson, analyst at London-based CMC Markets UK Plc who predicts Brent may fall as low as $76 a barrel in the next six months. “Although Iran could provide potential for prices to move higher in the short term, the overall outlook is down, based on the lack of economic growth.”