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UPDATE 5-Oil down on global impact of eurozone crisis

Crude oil futures fell below $98 a barrel on Tuesday, extending losses due to fears that the euro zone debt crisis will worsen and hurt the global economy, threatening growth in oil demand.

Optimism over a bailout for Spain’s troubled banks faded because of concerns about the package’s impact on public debt, while uncertainty surrounding elections in Greece on Sunday compounded worries the financial crisis in Europe will deepen.

European shares turned negative on Tuesday and the euro was flat, little changed at $1.2504 .

Brent crude futures slipped 76 cents to $97.33 by 0954 GMT. Earlier in the session, prices fell as low as $96.62 a barrel, close to this year’s low of $95.63 struck on June 4.

U.S. oil was down 52 cents at $82.18 a barrel after hitting a one-year low at $81.07.

“Europe is significantly affecting the growth outlook and, given China is already weak, further deterioration in the Eurozone crisis could tip the global economy into a recession,” said Guy Wolf, macro strategist at Marex Spectron.

“Despite that, the supply side in Energy does not look particularly bearish and the ‘Iran premium’ has been largely priced out.”  Read More

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Posted on June 12, 2012, in #business news and tagged , , , , . Bookmark the permalink. Leave a comment.

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