SG:Oil prices fall further as Spain worries intensify
AFP reported that oil extended losses in Asian trade with prices hitting multi month lows as Spain's banking woes intensified worries about the Eurozone.
Analysts said that New York's main contract, West Texas Intermediate crude for delivery in July was down 9 cents to USD 87.73 per barrel while Brent North Sea crude for July shed 29 cents to USD 103.18 in the afternoon. Prices had slumped Wednesday as the dollar rose to 2 year highs against the European single currency, making dollar priced oil more expensive and hurting demand.
WTI crude had plunged USD 2.94 on Wednesday to its lowest level since October, while Brent declined USD 3.21 its lowest close since December 16.
Mr Nick Trevethan senior commodities strategist at ANZ Research said that "Right now, the market is wide open. There is still scope for more downside pressure on prices if the bearish sentiment about the eurozone's future keeps up.ā€¯
Spain's economic woes were sharply in focus as its 10 year borrowing rates approached the 7.0% mark considered too high for governments to be able to service their debts. Economists fear Madrid will have to seek an international bailout following Greece, Ireland and Portugal despite assurances from Prime Minister Mr Mariano Rajoy.
The European Commission weighed in on Wednesday, placing the debt wracked country at the head of a critical list of 12 economies ordered to carry out sweeping reforms this year to try to stabilize the eurozone debt crisis.
Mr Barclays Capital said that concerns about a possible Greek exit and the risks of contagion from the periphery remain and in the absence of a policy response, oil prices are likely to remain under pressure.
