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Oil prices drop as investors express concern about Ireland, Asia

by Jorge Hernandez on November 16, 2010

Oil prices dropped for a third consecutive day on Tuesday, reaching the lowest figures in nearly two weeks. The prices fell in the wake of growing concerns over debt in Europe and the belief that governments will intervene to deal with the growing Asian market, Bloomberg reports.

The dropping prices indicate a lack of demand for the commodity, and comes in the wake of the Bank of Korea raising interest rates for the second time this year. The move was caused by rising inflation and was joined by China's government taking action to combat rising food prices. But perhaps the greatest cause for worry was the volatile state of Ireland's banks, which are hurting as a result of the real estate market's struggles. European ministers gathered in Brussels, Belgium,ac to discuss solutions.

Although Ireland's banks are in trouble, European Union officials are maintaining that their struggles will not impact the Euro, according to the Associated Press.

"European debt problems have re-emerged, scaring away investors from risky assets such as oil," Thorbjoern Bak Jensen, an analyst at Global Risk Management, told the news source. "We expect oil to continue trading in range between $81 and $90."

The price of oil fell to $83.55 a barrel, which is the lowest it has been since November 2. However experts believe that the price may drop even lower should China raise interest rates along with the Bank of Korea.

The drop in oil, coupled with the impending crisis in Ireland, caps off an eventful week for the world economy that began with the G20 summit in Seoul, South Korea, last week.

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