Here’s another major loser from the eurozone crisis.
With oil prices in dollars, and Europe a significant source of oil demand, the plummeting euro is making oil more expensive for Eurozone nations.
OPEC’s scared that this will reduce demand, thus pressuring global oil prices to fall in U.S. dollar terms, as Makis Theodoratos highlights:
OPEC members are monitoring closely the situation in Eurozone, and seem to be a little bit annoyed by the late reaction of European Union leaders to the Greek crisis. For the moment cartel members are not considering any urgent measures, such as a new cut on their daily production, and officially insist that better compliance on official exploring quotas can support oil prices to fair levers for consumers and exporters. But if euro’s appreciation against dollar continues, then OPEC will have to face a very serious problem.
It’s another reason for OPEC to be jawboning oil prices right now.