Oil falls on Greece's referendum

U.S. crude oil price fell on Tuesday as Greece's unexpected decision to call a referendum over its debt bailout caused renewed concerns about the euro zone. Worries about European debt crisis reemerged after Greek Prime Minister George Papandreou decided to let Greeks vote on a bailout agreed last week by the European leaders. The markets were shocked, fearing that Papandreou's proposal would cause more uncertainties to debt-stressed euro zone. Meanwhile, economic data from the U.S. and Britain came in weak, adding evidences to slowing economy and hurting oil demand expectation. The survey from the Institute for Supply Management showed U.S. manufacturing expanded at a slower pace in October, with the index dipping to 50.8 from 51.6, missing market's expectation. The UK PMI fell sharply in October to its 28-month low, showing big contraction in the manufacturing activities. And investors still kept close eyes on impacts of MF Global Financial's bankruptcy and acted very cautiously. The trading volume continued to be low. Besides, the euro fell as Greece's referendum weighed, resulting in a higher dollar. The dollar index rose about 1.5 percent, making the dollar-denominated crude oil less attractive. Light, sweet crude for December delivery dropped 1 dollars, or 1.07 percent to settle at 92.19 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for December delivery settled flat at 109.54 dollars a barrel, down 2 cents.