Oil futures down as EU summit begins

Today (June 28th) the leaders of the European Union (EU) have convened in Brussels for two days of talks that will focus on the eurozone sovereign debt crisis.

Investors will be watching this conference closely and oil futures have already dipped on account of forecasts that this summit will fail to deliver a consensus on how to bring the 17-nation currency bloc back to recovery and prevent contagion spreading.

The commodity has also suffered as a result of weekly US supplies falling.

Furthermore, investors will be aware that an EU-imposed ban in purchasing oil from Iran will commence on July 1st.

This action is part of the west's plan to put enough pressure on the nation to halt the Persian nation's nuclear development programme.

The Middle Eastern country is the second-largest exporter of the commodity in the Organization of Petroleum Exporting Countries, just behind Saudi Arabia.

Iran has stated its nuclear work is for power generation, but its refusal to allow authorities into parts of its operations have fuelled speculation the country is making weapons.

Matters within the eurozone, however, present a more pressing challenge, especially as Cyprus is now the fifth country to require bailout funding from its fellow member states having been heavily exposed to Greece's own debt crisis.

The eurozone is a major importer of crude and if its economy continues to flounder, it may result in manufacturing slowing down, leading to smaller shipments of the black stuff.

Leaders of the EU are deeply divided over their plans for the 17-nation bloc, with German chancellor Angela Merkel pitting herself against France and Italy by insisting they prioritise the region's economic wellbeing ahead of emergency action.

At 12:10 BST, Brent Crude Oil Futures were down 0.6 per cent to $92.9 per barrel.

West Texas Intermediate Crude Oil Futures were also lower, depreciating by 0.4 per cent to $80.1 per barrel.