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[File photo] Hasan Jamali/AP/Press Association Images
Crude oil

Greece's credit rating downgrade drags the price of US oil down with it

Oil prices slipped in the wake of concern about a weakening global economy. Analysts expect crude prices to fall over the next few months.

GREECE’S NEW STATUS as the country with the lowest credit rating in the world had a knock on effect on the price of US oil, as it settled at its lowest level in weeks.

Rating agency Standard and Poor’s has downgraded Greece’s credit status by three notches to the CCC grade, and has warned that any attempt at debt restructuring will be counted as a default.

Greece’s woes saw the price of oil and gas drop as news of the credit rating downgrade added to concerns about economic growth reports Reuters, thus pulling down demand. Investors are worried a disorderly restructuring of Greek debt could spark panic in the global bond market and torpedo a fragile global recovery.

A “cooling” in China’s economic growth also had an impact on US crude oil prices while concerns about the output increase of Saudi Arabia continued to weigh on the markets.

Some analysts expect crude prices to fall over the next few months as political upheaval in the Middle East and North Africa eases.

However the price of oil has rallied today on the back of a better-than-expected US retail sales report and a broad rally on Wall Street.

-Additional reporting by AP

Read more: Greece’s credit rating now the lowest in the world>