By V. Phani Kumar and Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — Crude-oil prices eased in electronic trading Tuesday, but pared earlier losses as the Spanish government managed to sell more than expected at a debt auction and markets across Europe generally pushed higher.
Light, sweet crude-oil futures for delivery in July CLN2 +0.95% dropped 10 cents, or 0.1%, to $83.16 a barrel on Globex, after finishing 76 cents lower in a regular session on the New York Mercantile Exchange Monday.
The losses overnight came as yields on 10-year Spanish sovereign bonds jumped over 7%, raising fears that the high costs may shut the government out of credit markets. Yields on Italian 10-year bonds also jumped over 6%, helping to dissipate the relief that followed the results of the weekend Greek elections.
The yield on Spain’s 10-year bond ES:10YR_ESP -1.75% backed off the prior day’s highs, but remained above 7% Tuesday.
“In our view, prices could also weaken further if [the] Organization of Petroleum Exporting Countries is slow to rein in excess production,” said Tim Evans, an energy analyst at Citi Futures Perspective.
“Our base case scenario has the global supply/demand balance returning to a closer balance over the second-half of the year on a combination of stronger seasonal demand and moderating OPEC output,” he added.
Most Asian markets declined on Tuesday, following a weak finish for the Dow Jones industrials overnight on Wall Street. Read Asia Markets.
U.S. equity futures pointed to a higher start for Wall Street Tuesday, with Dow Jones Industrial Average DJIA +0.60% futures up 23 points, or 0.2%, to 12,709, while S&P 500 Index SPX +0.77% futures rose 2.6 points, or 0.2%, to 1,343.50.
European stocks also moved higher as pressure on Spanish bond yields eased after the government paid higher yields on a short-dated auction of treasury bills, but raised slightly more than the top of targeted range.
Among other energy products, July futures for gasoline RBN2 -0.22% declined by 0.4% to $2.65 per gallon and heating-oil HON2 +0.67% futures for July delivery were steady at $2.62 per gallon.
Natural-gas futures NGN12 -1.86% for delivery in the same month fell 0.4% to $2.62 per million British thermal units.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.
