Crude-oil futures posted fresh losses in Asian trading Tuesday as worries about the euro-zone crisis outweighed a stalemate in negotiations over Iran's nuclear program.
Investor sentiment has turned from optimism Monday following Greek election results to concern over Spain's economy, as Spanish bond yields moved to alarmingly high levels. That hit crude prices on worries that more economic instability in the euro zone would hurt demand for oil.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $82.91 a barrel at 0648 GMT, down $0.36 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.27 to $95.78 a barrel.
Spain's borrowing costs have surged, with yields hitting 7.13% for 10-year government bonds, while a report from the Spanish central bank said that bad debts in the country were at their highest level in 18 years in April.
Investors will continue to watch negotiations in Moscow over Tehran's nuclear program. The talks, which conclude Tuesday, have so far failed to advance, with a planned embargo on Iranian oil due to start July 1.
Tensions between Iran and the West have cooled considerably in recent months, easing fears of an imminent supply disruption, although two previous rounds of talks were unsuccessful in producing a firm agreement.
Market sentiment may remain fragile until a European Union leaders summit in Brussels June 28-29, when further policy support may emerge to tackle the euro-zone crisis, analysts at OCBC Bank said in a note.
Investors are also awaiting a meeting of the U.S. Federal Reserve's policy-setting committee later Tuesday for any announcement on further monetary easing.
The combination of a slowing global economy and steady output by major oil producers will keep crude-oil prices subdued in the near term, said Mike Sander of Sander Capital Advisors.
"At this moment in time, there aren't too many reasons to be bullish on oil," he said, noting that U.S. consumers are consuming less, while non-OPEC production is up 1.2 million barrels a day at a time of slowing growth in the major emerging economies.
"The price of oil has stayed in the $83 range over the past month and looks to remain in the low $80s area," said Mr. Sander.
Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 99 points to $2.6510 a gallon, while July heating oil traded at $2.6154, 23 points lower.
ICE gasoil for July changed hands at $841.00 a metric ton, down $0.50 from Monday's settlement.
Write to Jacob Gronholt-Pedersen at jacob.pedersen@dowjones.com
