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Greek prime minister George Papandreou may have made a big mistake. As part of a plan to fix his nation’s ruined economy, he announced Wednesday that he aims to cut 30% of civil servants’ holiday bonuses which are part of Greece’s "14th salary" payment schedule.

Papandreou has to walk the line between answering the demands of European Union nations who could bail Greece out of its crisis and rallying citizen support for his reforms. One way or another, he has to cut costs.

"The country hasn’t lived within its means," says Barry Eichengreen a political science and economics professor at the University of California, Berkeley. "Now, the government has to tighten its belt, and the private sector does too."

But cutting a key part of the nation’s employee benefits may not be the swiftest move. Greek civil servants would be willing to go to war over major changes in the 14th salary, the leader of Greece’s largest labor union, Yiannis Panagopoulos, has reportedly said. And while holiday bonuses certainly sound like excess spending, they aren’t necessarily.

The 14th salary works like this: Greek workers get their annual salary in roughly 14 installments. On top of 12 monthly payments, employees receive double their paychecks in December, right in time for Christmas consumerism. They also receive half of their monthly spending in the spring to shell out on goods for Easter. Then they get another half-salary boost in July, before their traditional summer vacation.

But the 14th salary system isn’t the problem with the Greek economy, says Elias Papaioannou, an expert on international economics at Dartmouth College, "it’s just an alternative way to distribute."

It’s not even that alternative. Other EU countries use plans that are much the same. According to international salary guide website Just Landed, Belgium, Germany, France and Holland have similar holiday bonus-based payment systems that factor in to workers’ annual salaries.

There is a difference between Greece’s 14th salary system and special allowances given to some government employees — the latter helped bankrupt the Greek economy. But many government employees don’t have disproportionately high salaries, says Papaioannou. Greek families plan their spending around the 14th salary, and they have for a long time. The Greek Ministry of Labor officially launched the program in 1945 after the Nazi occupation ended in Greece.

"I think it comes out of this history where working class people didn’t have spare cash under the mattress," says Eichengreen. "This was a way for everybody to be sure that they could budget seasonal expenses."

A real fix for the system

Another money-saving measure that Papandreou mentioned Wednesday was hiking taxes on luxury goods. But while the government has to start raising money somewhere, Eichengreen says it’s a drop in the bucket. "The big problem is not that people don’t pay higher taxes on their Gucci handbags; the big problem is that lots of people work off the books."

Unorthodox compensation has been a major complaint of the Confederation of Public Servants, a Greek organization for public service unions. In 2008, the group demanded a uniform pay scale, because the Greek government has a history of giving special allowances to groups of civil servants as a quick fix for labor unrest or to meet lobbyist demands. Dishing out special funds has thrown off the government’s pay scale for public sector employees, allowing huge salary discrepancies to develop.

"In Greece, public state employees are asking their superiors to move to the Ministry of Economics and Finance," Dartmouth’s Papaioannou points out, because of the sizeable special allowance bonuses there. That money plays a big part in Greece’s government spending accountability problem — it’s difficult to track because some special allowances aren’t fully taxed.

What the Greek economy really needs is more transparent government spending, says Papaioannou. He is hopeful that the economic crisis will force Greece to move in that direction. But EU leaders and Greek citizens are still waiting for a satisfactory proposal from prime minister Papandreou to tackle that monster of a problem. 

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Frustration is turning to anger in the ranks of hourly workers at General Motors Co.’s Lockport plant, formerly Delphi Thermal Systems.

The cause is GM’s attempt to gain contract concessions from the United Auto Workers union and its members.

“Definitely there is frustration on the floor. And some are angry, yes. We took a pretty good pay hit a couple years ago,” said Gordie Fletcher, president of UAW Local 686 Unit No. 1 at Lockport.

According to Fletcher, GM wants members to forego a 3.75 percent cost-of-living raise that was scheduled to go into effect in January but which has not been paid.

Also drawing workers’ ire are bonuses that the union says salaried workers have received.

“We don’t think that’s fair. They’re rewarding one group and taking away from another. There should be shared sacrifice,” Fletcher said.

Increasing the frustration is the absence of any new work being assigned to Lockport.

“We want work brought into the plant and aren’t seeing it. Nothing is being said other than that we could have the opportunity to bid on new work – nothing, though, about when or anything else,” Fletcher said.

“That adds to our immense sense of frustration,” he added.

Simmering situation

Anger reportedly is simmering in the ranks of the UAW at the four former Delphi Corp free credit report. plants that, like Lockport, reverted to GM in 2009 as part of Delphi’s restructuring out of bankruptcy protection.

Much of the opposition comes from workers at plants in Lockport and Rochester, and Saginaw and Grand Rapids, Mich., where UAW members say they are being pushed to renegotiate a contract that included concessions they signed only last year.

“We haven’t seen anything in writing yet, but we know they’re coming for us again,” a GM worker from Grand Rapids recently told a Detroit-based freelance reporter. “We also know they want a ‘no strike’ clause.”

Negotiations (on the concessions) are continuing at each of the plants “a couple times a week and sometimes daily – but there has been very little headway. Actually, I’d classify it as no headway,” Fletcher said.

Unlike previous years, when plants were covered by an industrywide contract negotiated with the Detroit automakers, each former Delphi plant now is responsible for its own labor agreement. The current contract expires in 2011.

A GM spokesman said discussions between GM and the UAW are ongoing and further details are unavailable.

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The Federal Reserve is looking into what role Goldman Sachs and other Wall Street firms may have played in Greece’s debt problems, Fed Chairman Ben Bernanke said Thursday.

"We are looking into a number of questions related to Goldman Sachs and other companies and their derivatives arrangements with Greece," Bernanke said.

Bernanke’s response was to a question posed by Senate Banking chief Christopher Dodd, D-Conn., who asked about U.S. financial banks and hedge funds that are making financial bets that the Greek government will default on its loans.

Goldman Sachs (GS, Fortune 500) and other banks have been in the news over reports they secretly helped raise $1 billion in credit for Greece, in a way that was off the balance sheet and helped hide Greece’s big debt woes from European Union regulators.

The New York Times reported recently that some of these same banks were also now making side bets that Greece defaults on loans it owes U.S. banks and hedge funds. By betting in favor of default, the U.S. banks and hedge funds win whether Greece pays off its loans or not.

Dodd asked whether Bernanke thought there should be limits on the use of these types of bets to prevent firms from creating intentional runs against government.

"The rising price of these contracts contribute to an atmosphere of crisis, making it even more difficult for the Greek government, in my opinion, to borrow," Dodd said.

Bernanke said that while such bets are an important financial tool to help mitigate risk, the Fed planned to look into reports that the financial bets were made.

"Obviously, using these instruments in a way that intentionally destabilizes a company or a country is — is counterproductive, and I’m sure the SEC will be looking into that," Bernanke said payday loans. "We’ll certainly be evaluating what we can learn from the activities of the holding companies that we supervise here in the U.S."

Goldman Sachs spokesman Michael Duvally declined to comment, adding the company doesn’t talk about legal or regulatory matters.

The kinds of financial bets that regulators are concerned about are credit default swaps, which are insurance contracts — the same kind of contracts that pushed the insurance giant American International Group (AIG, Fortune 500) to the brink of collapse.

During the real estate boom, investment firms were buying and selling securities backed by pieces of mortgages. The firms also paid AIG to back up the investments if they turned sour.

When all the real estate investments went bad at the same time, AIG didn’t have enough money to pay back all the promises it had made.

Later in the hearing, Bernanke noted the similarity of the situation of banks making bets to hedge against Greek debt to banks that made bets to hedge against real estate debt, which imploded AIG.

"The poster child for that would be the capital arrangements that banks took out for AIG," Bernanke said. "Derivatives have a legitimate purpose, but if they’re used to distort accounting results or regulatory ratios, that needs to be addressed."

Congress is considering legislation to make such financial bets more transparent in its regulatory overhaul package. The Senate has yet to pass a bill on that subject. 

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Clayton — St. Louis’ newest casino got the green light from state regulators Wednesday, clearing the way to open its doors next week.

The $375 million River City Casino in Lemay won final approval for a license from the Missouri Gaming Commission, the 13th and final gaming license available in the state.

It will be Pinnacle Entertainment’s third St. Louis-area casino, and the second to open here in a little more than two years, capping a building boom that has shaken up the region’s $1 billion gambling industry.

Todd George, Pinnacle’s regional vice president for St. Louis, said he expects River City to generate about $17 million a month in gambling revenue when it opens, making it the region’s third- or fourth-busiest casino.

It also will employ about 1,200 people, which was music to the ears of Garry Earls, chief operating officer for St. Louis County.

"Those people, we know their names. They’ve got a real job. They’re getting a real paycheck," he said. "And those paychecks are happening in south St. Louis County."

The casino is good news for the county for another reason: It gives new life to a dirty, abandoned industrial site on the Mississippi. Pinnacle built the casino on the long-empty National Lead site just south of the mouth of the River Des Peres. It is a place St. Louis County owns and has been trying to reuse for years.

"It was contaminated. It was in a flood plain. And there was no way to get there," said Denny Coleman, president of the St. Louis County Economic Council. "But Pinnacle made this a great site."

Pinnacle also will pay rent to the county — $4 million a year. For the first five years, three-fourths of that will fund economic development projects in Lemay, Coleman said.

But some say casinos do the region more harm than good, and those people showed up Wednesday as well.

All the money that Pinnacle earns and pays in taxes comes from the pockets of St. Louisans, who lose it at the casino’s 2,100 slot machines and 55 table games, they noted. And much of it, observed Don Cannon of south St. Louis County, will flow out of the region.

He pointed to a study from 2004 by gambling economist William Thompson, which projected that six St. Louis casinos would drain $140 million out of the local economy. Add another, Cannon said, and that number will only grow.

"There’s no way we can come out ahead," he said.

But the commission wasn’t there Wednesday to debate the merits of casino gambling cash advance payday loan. They were there to award a new license. And after touring River City on Tuesday, they were ready to do just that.

"I was in awe," said chairman Jim Mathewson. "It’s a beautiful facility. Very well done."

It was that kind of meeting, full of kind words and handshakes. And while it was under way, no one mentioned the two other issues that are roiling the St. Louis gambling scene: a casino proposal for north St. Louis County, and the gaming commission’s bid to close the President Casino downtown.

A group of developers have won local zoning approvals for a $350 million casino near the Columbia Bottoms, but they have not applied for a state gaming license — because none are available. About 30 opponents of that plan showed up Wednesday, hoping to make their objections heard.

They were denied a spot on the agenda, but Mathewson did promise a public hearing in St. Louis County if the commission receives an application for a casino there.

Still, opponents found a way to make their point.

Lorin Crandall, clean water coordinator for the Missouri Coalition for the Environment, noted that River City was a smart reuse of a polluted site, far smarter than building a casino in environmentally fragile conservation area — near where the North County project would go.

The other issue that was only referenced sidelong was the President.

Less than a month ago, the same group of commissioners voted unanimously to strip the ailing riverboat of its license, citing its poor financial performance. But Wednesday, the President went unmentioned, save a few references to things that might happen "if a license opens up."

On Friday, Pinnacle told the commission it will fight the ruling. In a seven-page appeal, the company said that it has done nothing to cut offerings at the President since December 2008, when the state renewed its license for three years, and that stripping the license now is "unreasonable and an abuse of discretion."

Jerry Riffel, an attorney for Pinnacle, said he expects a gaming commission hearing on the matter in April or May, and that it could yet wind up in court.

But that is down the road. Wednesday was all about celebrating a new casino in St. Louis.

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Toyota Motor is struggling to hold onto its customers through its recall crisis. But the ones it might have the most trouble keeping are the biggest: rental car companies.

Any reluctance by people to rent Toyotas would create problems for companies like Enterprise Holdings, Hertz Global Holdings and Avis Budget and discourage them from buying new cars from Toyota.

Spokeswomen with Enterprise, the nation’s largest car rental company, and Hertz (HTZ, Fortune 500) said that this isn’t a widespread problem but some customers are unwilling to rent recalled models of Toyotas that have since been fixed.

"For the most part people are pretty accepting of the repairs and don’t have problems. But we have had customers who don’t want Toyotas. We do our best to find them a different model," said Hertz spokeswoman Paula Rivera.

Enterprise spokeswoman Laura Bryant said some customers have also declined the repaired Toyotas, but could not give details of how common this is. Toyota only makes up about 4% of Enterprise’s fleet.

But industry experts say they expect drivers declining to rent Toyotas right now is likely fairly common, given the choices available to renters in most circumstance.

"There are plenty of arguments as to why Toyota owners will keep driving their cars," said Jesse Toprak, a vice president with TrueCar, a car pricing Web site. "But there’s no reason to take a risk and rent one, given the alternatives."

David Cole, from the Center for Automotive Research, a Michigan think tank, said it’ll take only a fraction of renters to decline Toyotas to sour the rental companies on the brand.

"The car is only making money when the wheels are moving," he said. "If it’s parked, it’s a liability."

Even if customers are happy to drive a rented Toyota, the hit to the resale values of recalled models may make rental car companies think twice about buying more Toyotas.

Kelley Blue Book, which publishes used car values, lowered the estimated value of all recalled models about 4% since the crisis began. The declines are even bigger for newer models.

Traditionally Toyota’s strong resale values were a selling point for rental companies. Toprak said the decline of a few hundred dollars in the value of a used Toyota due probably isn’t enough to sway consumers, but that such a small shift "can make or kill a rental company’s decision to buy a car or not" since the profit margins on these vehicles are so thin.

Toyota is not as reliant on rental car companies as U.S. automakers General Motors, Ford Motor (F, Fortune 500) and Chrysler Group or Korean automaker Hyundai Group. Each of them depend on rental car companies for more than 10% of their sales.

But two of the recalled models — the Corolla and the Camry — were No. 2 and No. 3 in terms of vehicles purchased by U.S. rental car companies in 2009, according to figures from an industry source.

It’s estimated that about 130,000 Toyotas, or almost 9% of the brand’s U.S. sales last year, went to the rental car fleets. That’s enough to keep a single Toyota factory going more than six months.

In addition, the big increase in new vehicle purchases by rental car companies were the reason U.S. auto sales rose in January. Sales to consumers fell from the low levels of a year earlier. So it will be crucial for Toyota to not lose ground in the key rental car market.

The spokeswomen for Enterprise and Hertz would not speculate on their future Toyota purchase plans, saying they are concentrating on getting recalled vehicles back on the road as soon as possible.

Bob Barton, president of the American Car Rental Association, said purchase decisions will likely depend more on what incentives Toyota is willing to offer rental car companies, such as whether Toyota will finance the purchases or promise to buy back the cars after a set number of months.

But Toyota’s decision to temporarily shut down U.S. plants during the crisis is also a reason for concern for rental companies that want to make sure they get the cars they order, Barton said.

Cole said that all the uncertainty surrounding Toyota — the company faces a Congressional hearing and potential customer lawsuits — could discourage purchases by the rental companies.

"If you’re the rental car industry, your assumption is that life is not going to get better soon for Toyota," he said. 

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Japan’s central bank chief escalated pressure on Prime Minister Yukio Hatoyama to contain the world’s largest debt with a warning that investor “trust” won’t be assured in the aftermath of Greece’s budget woes.

“It’s important to gain the trust of financial markets by showing a path for fiscal consolidation,” Governor Masaaki Shirakawa said in Tokyo yesterday. He spoke after his policy board kept interest rates, the level of its government-bond purchases, and bank-lending programs unchanged.

Shirakawa’s remarks reflect his concern that increasing the Bank of Japan’s debt purchases risks giving investors the impression that it is willing to fund fiscal expansion. They also highlight rising tension with political leaders after Finance Minister Naoto Kan this week stepped up heat on the BOJ to fight deflation by saying Japan needs an inflation target.

“Shirakawa wants to give a fresh reminder that Japan will lose trust from the market if the nation uses monetary policy to support the government’s finances,” said Norio Miyagawa, a senior economist at Shinko Research Institute in Tokyo. “Basically, it’s impossible to escape from deflation with monetary policy alone.”

Credit-default swaps tied to Japan’s government bonds show an increase in risk. The cost of protecting the debt from default for five years has doubled to 78.8 basis points since the Hatoyama administration started on Sept. 16, according to prices from CMA DataVision in New York.

Bond Yields

The yield on Japan’s 10-year bond fell one basis point yesterday to 1.315 percent, a three-week low amid the prospect of prolonged deflation.

As part of its efforts to sustain an economic recovery, the Bank of Japan unveiled a program of lending 10 trillion yen ($109 billion) to commercial banks in December. It’s also buying 1.8 trillion yen in government bonds each month, and has kept the benchmark interest rate at 0.1 percent since December 2008.

“Monetary policy isn’t aimed at fiscal funding,” Shirakawa said. “It’s aimed at achieving sustainable growth under stable prices. It’s important that governments respect this stance and markets have faith in it.”

Concerns about the state of public finances in European nations including Greece have roiled global financial markets and weakened the euro.

“Increasingly, attention is being paid to fiscal developments of each country and their impact on markets, as we can see in the case of Greece,” Shirakawa said.

‘Burning House’

Central bank board member Seiji Nakamura warned this month that the government can’t ignore Greece’s fiscal woes, saying in a speech that the European country’s concerns aren’t just a “burning house on the other side of the river.”

Hatoyama’s administration has yet to detail plans to repair its finances since Standard and Poor’s warned last month that it may cut the nation’s AA rating. Kan aims to develop a fiscal strategy by June, and this week he said the government will consider overhauling the sales tax.

Hatoyama later repeated his stance that the government won’t raise the sales tax for at least four years. His Democratic Party of Japan is trying to sustain the recovery as it faces an upper house election in July.

Economic growth accelerated to a 4.6 percent annual pace in the fourth quarter, led by a trade revival that prompted exporters including Panasonic Corp. to Nissan Motor Co. to raise their profit forecasts. At the same time, the GDP figures showed deepening price declines that threaten to stunt the rebound.

Kan’s Battle

Kan has been pushing the central bank to battle deflation as his ability to bolster the recovery is constrained by a public debt that’s approaching twice the size of the economy. Shirakawa says the bank can’t spur prices on its own because adding cash to the economy isn’t enough to drive spending.

Responding to Kan’s suggestion this week of a 1 percent inflation target, Shirakawa said the central bank has already examined the relative merits of targeting and concluded that its current policy framework is the “most appropriate.”

Bank of Japan board members said in December that their “understanding” of price stability is increases of up to 2 percent, with a median of 1 percent.

Consumer prices excluding fresh food fell 1.3 percent in December from a year earlier. This week’s GDP report showed the GDP deflator, a broader gauge of prices, tumbled 3 percent in the fourth quarter, the most since records began in 1955.

Price Targeting

Shirakawa said putting too much focus on price movements may lead policy makers to overlook distortions accumulating in the economy. Targeting a certain level of prices over the short term may hamper the goal of achieving sustainable economic growth, the governor said.

The central bank reiterated yesterday that overcoming deflation is a “critical challenge” and it will “aim to maintain the extremely accommodative financial environment.”

“The governor’s comments showed that the BOJ is trying to quietly but adamantly resist” government pressure, said Kyohei Morita, chief economist at Barclays Capital in Tokyo.

“The BOJ is saying: while the government can’t implement additional expansionary policies because of its high debt, the bank can’t take the government’s place,” Morita said. “The two institutions can’t just fill in for each other.”

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Low-cost airline Allegiant Air began nonstop service from Tri-Cities Airport in Blountville, Tenn., to Orlando International Airport on Feb. 15.

Allegiant previously offered nonstop service to Orlando via Orlando Sanford International Airport.

The flights operate four times weekly between Tri-Cities Regional Airport and Orlando International Airport, with service Monday and Friday. Flights depart Tri-Cities at 6:30 p.m., arriving in Orlando at 8:05 p.m. Flights depart Orlando at 4:10 p.m., arriving in Tri-Cities at 5:50 p business cards design.m. Allegiant Air also provides nonstop service from the Tri-Cities Airport to the Tampa Bay area and Fort Lauderdale.

Las Vegas based Allegiant Travel Co. (Nasdaq: ALGT) and its Allegiant Air subsidiary link travelers in small cities to top leisure destinations such as Las Vegas, Phoenix, Los Angeles, Fort Lauderdale, Orlando and Tampa/St. Petersburg.

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Senate Democrats’ draft plan for job creation, circulated Tuesday, contains a couple of employment measures and a lot of leftover business.

What’s not included in the $85 billion draft legislation is additional funds for states or stimulus money for infrastructure, which Republicans have said they will not support.

President Obama met with Senate and House leaders on both sides of the aisle Tuesday to push for a jobs proposal. The House passed a $154 billion bill in December, but momentum has stalled in the Senate, where Democrats recently lost their 60-vote filibuster-proof edge.

While Senate Majority Leader Harry Reid, D-Nev., said lawmakers need to pass a jobs bill this week, Republicans were not so sure. Senate Minority Leader Mitch McConnell, R-Ky., said GOP lawmakers need to know more about the package.

"My members need to be able to feel like they understand what they are being called upon to support," McConnell said.

The Republican leader, meanwhile, said he’d like to explore a competing vision for job creation that centers around international trade and clean energy.

What’s in the bill

The central feature of the 362-page bill is a payroll tax credit for businesses who hire and retain the unemployed. The measure, crafted by Sen. Charles Schumer, D-N.Y., and Sen. Orrin Hatch, R-Utah, spares businesses from paying Social Security taxes on new hires who had been unemployed for at least 60 days. The proposal is expected to garner bipartisan support.

The legislation would also extend the deadline to file for federal unemployment benefits and the 65% Cobra health insurance subsidy to May 31. They currently expire a month’s end.

Without an extension, nearly 1.2 million workers will become ineligible for federal unemployment benefits in March, according to the National Employment Law Project.

The bill would also extend two stimulus provisions: A small business loan guarantee and the Build America Bonds program, which helps states and municipalities fund capital construction projects.

Federal funding for highways would also be extended. Contractors and some lawmakers have been pushing to reauthorize the six-year $286 billion federal transportation funding act, which expired at the end of September. They say this is more crucial to job creation than an additional shot of infrastructure spending paydayloan.

The rest of the bill, however, covers business the Senate didn’t address last year. It includes measures such as extending five dozen expiring tax provisions and credits, including allowing people to deduct state and local sales taxes from their federal income tax levy. It also extends many health care and Medicare provisions.

Also included are measures affecting satellite television, taxes on foreign accounts, and pension funding.

What’s not in the bill

The Senate bill does not contain any assistance for states, which are facing massive budget deficits and looking to Washington for help.

Without more federal assistance, states may have to take drastic actions to close an estimated $180 billion budget gap for fiscal 2011, which starts July 1 for most states. These moves could cost the economy 900,000 jobs, according to the Center on Budget and Policy Priorities.

The House bill would take $27 billion in TARP bank bailout funds to the states to prevent them from laying off teachers, police officers and firefighters.

Also missing is extra money for infrastructure projects. The House bill would pump more than $35 billion in TARP funds into highways and mass transit, as well as $2 billion for clean water projects and another $2 billion for the building and repair of affordable rental homes and public housing. The rest of the infrastructure funds would be spent on school construction and repair.

Republicans, however, have said they oppose shifting TARP money to job creation. They also have said they don’t think infrastructure spending creates jobs, in direct contrast to congressional Democrats and the White House.

One sticking point for the GOP could be that the bill does not address the estate tax, which expired this year but will return in 2011. The two sides can’t agree on where to set the tax and some Republican leaders want assurances from the Democrats that this will be resolved soon.

While Reid last week said he wanted lawmakers to vote on a bill on Monday, a blizzard wreaked those plans. Another snowstorm on Wednesday is likely to delay the bill’s progression again. Lawmakers take a week-long break for Presidents Day after Friday. 

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Oil prices fell Friday after a mixed report on the employment picture.

What prices are doing: Crude oil for March delivery fell $1.95 to settle at $71.19 a barrel Friday.

Oil had rallied at the beginning of the week, gaining nearly 6% on expectations that inventory would fall more than expected.

But a slight dip on Wednesday was followed by a 5% price drop on Thursday after a government inventory report showed a surprise build in supplies. Over the course of the week, oil prices fell $3.24, or 4%.

A research note from Deutsche Bank noted that commodities across the board "have been unable to escape the widespread correction occurring across ‘risky’ asset classes this week."

In addition to pushing crude lower, Thursday’s trading session also sent gold prices and stock indexes down.

The Deutsche Bank note added: "We believe the more skittish financial and economic outlook will enhance the appeal of defensive commodity strategies."

What’s driving prices: In its monthly report on employment, the Labor Department said 20,000 jobs were lost in January even though the unemployment rate fell to 9.7% from 10% in December.

Economists had forecast an increase of 15,000 jobs in January and expected the unemployment rate to remain steady at 10%.

Investors are also becoming increasingly worried about growing debt abroad, which could push oil lower.

What analysts are saying: "Concern about Greece and other countries in Europe all just points to demand weakness," said James Williams, president and energy economist at WTRG Economics.

"Through the spring, the pressure will be downward," he added. "It’s low demand season and the economies of the world are clearly not recovering at any great pace." He said prices may slip as low as $60 a barrel this year on lower demand and ample inventory.

The Deutsche Bank research note said crude prices have been able to stay strong amid "an environment of rising risk aversion," but that resilience will likely not persist.

"A period of stronger oil prices is unlikely to be sustainable until global oil demand, including gasoline demand in the U.S., gets on more solid footing," the note said. It added that domestic oil demand in January 2010 was 2% below year-ago levels. 

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