SG:Eurozone fears revived as oil falls to lowest in months after polls
Gulf News reported that Paris Oil fell to the lowest level in more than four months after European elections stoked speculation that austerity efforts will be derailed and weaker than expected jobs data underscored concern the US economy may falter.
A purchasing managers index showed that futures slumped as much as 3.2% to the lowest intraday price since December 20, extending 4% drop on May 4th 2012 after US payrolls rose by the least in six months. Euro region services and manufacturing output contracted in April. France elected Socialist Francois Hollande as president and Greek voters flocked to anti bailout parties.
Mr Nam Truong dealer at London Capital Group Holdings said that "Elections in France and Greece brought Eurozone fears back to the fore. Investors are concerned that European austerity measures will falter and additional stimulus will be needed to prop up ailing Eurozone economies."
Brent oil for June settlement slid 73 cents or 0.6% to USD 112.45 per barrel on the London based ICE Futures Europe exchange. Trading volumes dropped amid a UK public holiday. The European benchmark contract's premium to West Texas Intermediate was at USD 14.87 up from USD 14.69 on May 4th 2012.
Mr Michael McCarthy chief market strategist at CMC Markets Asia Pacific Pty in Sydney said that "It's a confluence of factors dragging oil markets lower. Weaker than expected jobless numbers and weak services PMI clearly rattled markets as did the Greek and French election results."
