Oil Is Set for Third Weekly Drop on Europe, U.S. Growth Concern


By Alexander Kwiatkowski

May 21 (Bloomberg) -- Crude oil was poised for a third weekly decline as European leaders struggled to contain the region’s debt crisis and reports cast doubts on the strength of the economic recovery in the U.S., the largest energy consumer.

Oil fell as Europe’s equity markets dropped amid growing concern that the region’s governments lack a common position on how to resolve the debt crisis. European Union finance ministers plan to meet today in Brussels to discuss sovereign debt. An index of U.S. leading economic indicators fell last month and more Americans applied for weekly unemployment benefits.

“It’s all about the EU debt crisis and whether it’s leading Europe into another recession, with a negative impact on oil demand,” said Andy Sommer, an analyst at EGL AG in Dietikon, Switzerland. “Sentiment has turned bearish, but data suggest this bearishness is overdone.”

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