Oil prices fell under $98 per barrel Friday morning in Asia after the disappointing EU meeting. Futures dropped as much as 0.8 percent after sliding 2.1 percent yesterday.
In London, Brent crude was down 67 cents at $107.28 on the ICE futures exchange.
Oil also fell before the Organization of Petroleum Exporting Countries meets next week in Vienna. Group members will probably fail to agree on new production quotas as Saudi Arabia pumps crude at the fastest rate in more than 30 years and Iran faces losing customers because of European sanctions.
Even if most of the EU countries agreed Friday to an ambitious treaty tying their finances together in the hopes of solving Europe’s debt crisis, the opposition led by Britain created a deep rift in the union.
However, despite the division – which will leave Britain out of the new pact, with the Czech Republic, Hungary and Sweden still weighing participation – Mario Draghi, the European Central Bank president, signalled his approval, a key vote of confidence that could allow the ECB to move more aggressively in eurozone bond markets.
Euro zone concerns also trumped fresh signs that the U.S. economic recovery was gaining traction, as jobless claims fell last week to a nine-month low, according to a report on Thursday.
In other energy trading on the Nymex, natural gas fell 1.8 cents at $3.44 per 1,000 cubic feet. Heating oil fell 1.1 cents to $2.92 a gallon and gasoline futures rose 1.3 cents to $2.56 a gallon.