Oil prices dive as EU holds crisis summit

Oil prices tumbled Thursday as European Union leaders held a two-day summit on the eurozone sovereign debt crisis that few in the markets expect will deliver significant measures to contain it. New York's main contract, light sweet crude for August, dived $2.52 from Wednesday, closing at $77.69 a barrel. In London trade, Brent North Sea crude for delivery in August dropped $2.14 to $91.36 a barrel Matt Smith at Summit Energy said the New York market was dragged down by skepticism that the EU summit will produce solutions to the debt crisis. "Everything was up this morning and then it reversed," Smith said. Traders believe "there is potential for nothing to be solved" at the EU summit, which continues Friday. "It will be interesting to watch tomorrow if prices go below $75 a barrel," Smith said. Meanwhile, some kept an eye on the confrontation between the West and Iran over its nuclear program, allegedly a cover for weapons development. Tehran insists the program is solely for peaceful purposes. Iran's chief nuclear negotiator, Saeed Jalili, warned the EU in a letter on Thursday that new sanctions will have "repercussions" on talks over his country's atomic activities. The letter, made public by Iranian state media, "warned the West of repercussions of taking action which is far removed from the logic in the talks and of using illegal methods against the Iranian nation." It was sent on the day the United States ratcheted up sanctions on foreign companies doing business with Iran's central bank, and just ahead of the full implementation on Sunday of an EU-wide embargo on Iran's oil exports first announced in January.