Crude oil prices were rather volatile on Friday morning, following an 11 percent sell-off so far this week. Oil prices have fallen from an 18-month high of $87.15, which was hit on Monday. Oil was driven lower by the continued turmoil in Europe and specifically the debt situation in Greece.

The Euro itself hit a 14-month low this week at about $1.25 versus the US dollar. Concerns continue to grow that the debt crisis will spread from Greece to other weak European economies including Portugal, Spain, Italy and Ireland. If these countries are forced to make drastic budget cuts, it will effect economic activity and therefore oil demand in those countries.

This view was summed up by John Kilduff of Round Earth Capital in New York, “The uncertainty, as it relates to the UK and Europe, is too formidable for energy to mount a rally off the impressive [US] employment data. The recovery thesis that got crude up near $90 per barrel is in serious question at the moment.”

However, many analysts look at the emerging economies and take a different view. They see the fall in the price of oil as temporary. These analysts expect oil prices to rebound as a global economic recovery boosts demand. In a report, Barclays Capital said “We view the fall in prices as transitory, as there has been hardly any deterioration in oil market fundamentals.”