18 April 2012 12:28 [Source: ICIS news]
LONDON (ICIS)--The front-month ICE Brent contract weakened by $1.18/bbl (€0.89/bbl) on Wednesday on the back of renewed concerns over the Spanish economy and risks to other European countries.
By 10:25 GMT, the front-month June Brent contract had touched an intra-day low at $117.60/bbl, a loss of $1.18/bbl compared to the settlement on Tuesday. The contract then edged marginally higher to trade around $118.00/bbl.
At the same time the front-month May NYMEX WTI contact was trading around $114.25/bbl having touched an intra-day low at $104.08/bbl, a loss of 12 cents compared to the close on the previous day.
On Tuesday, Spain raised more funds than expected in its 10-year bond sale. However, on Monday its yields exceeded 6%, a level which is widely viewed as unsustainable. Concerns are mounting that Spain may need to dip into the European financial stability fund if yields continue to remain at unsustainable rates.
The NYMEX WTI market is gaining momentum after news earlier in the week that the reversal of the Seaway pipeline in the US could be implemented earlier than expected if the move gains regulatory approval.
The Seaway pipeline currently flows towards the US energy hub in Cushing, Oklahoma. Due to its landlocked geographical location, crude stocks have built up because of difficulties moving stocks to other regions of the US.
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