SINGAPORE: Oil extended its losses in Asian trade Friday on growing concerns that the eurozone's debt woes could worsen, causing a global crisis that would ravage energy demand, analysts said.
New York's main contract, West Texas Intermediate (WTI) crude for delivery in June, was down 90 cents to $91.66 per barrel while Brent North Sea crude for July shed 99 cents to $106.50 in the afternoon.
WTI crude closed at $92.56 a barrel in New York trade on Thursday, the lowest level since November 1, while Brent slid $2.26 to $107.49, its lowest since December 30.
Prices have fallen considerably after soaring on the back of Middle East tensions earlier this year.
Current WTI prices are 17 percent lower than the contract's highest price this year of $110.68 reached on February 24. Brent has lost about 15 percent from its peak this year of $125.61 reached on March 23.
"A weakening of sentiment has brought oil prices down sharply... with sovereign debt fears a key element in a mounting loss of faith in economic, and hence demand, prospects," said Barclays Bank in a commentary.
"The current bout of concerns have arisen from the resurgent fears about the Spanish and Italian banking systems and speculation that Greece may have to exit the euro," it added.
In Greece, a caretaker technocrat government took office on Thursday to organise the debt-plagued nation's second elections in just six weeks after an inconclusive May 6 vote.
The polls left Greece in limbo, pushing the financial markets and euro down sharply, and the new election on June 17 offers no guarantee of a viable government able to implement an EU-IMF bailout that has divided the country.
Markets were also pressured by official data that showed Spain -- another eurozone economy crippled by debts -- sank into recession with a 0.3-percent contraction in the first quarter of 2012.
Spain raised 2.494 billion euros ($3.16 billion) in a sale of three and four-year government bonds on Thursday, but was forced to pay higher rates in a sign of escalating concern over the country's debt position.
Comments
Comments are closed.