Crude falls on eurozone worries, Spain bailout request

25 June 2012 13:04  [Source: ICIS news]

SINGAPORE (ICIS)--Crude futures prices declined on Monday, giving back earlier gains, with ICE Brent falling by more than $1/bbl at one stage on renewed eurozone debt fears following news that Spain had formally requested a bailout for its banking sector.

At 11:41 GMT, August Brent crude on London’s ICE futures exchange was trading at $90.00/bbl, down by 98 cents/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $89.86/bbl, down by $1.12/bbl.

August NYMEX light sweet crude futures (WTI) were trading at $78.91/bbl, down by 85 cents/bbl on the previous close. Earlier, the US benchmark fell to a session low of $78.79/bbl, down by 97 cents/bbl.

News that Spain had formally requested a bailout for its troubled banking system again heightened concerns over the eurozone debt crisis and pushed both crude and equity markets lower, despite an agreement from eurozone countries to lend Spain up to €100bn ($125bn).

The move by Spain erased earlier crude market gains. Prices had risen earlier in Asian trading on Monday on the positive impact of an agreement reached on Friday between the four largest eurozone nations to boost growth with some €130bn to be made available to raise economic output.

There were expectations that European leaders will push for greater monetary union and firm up measures to stimulate growth at a EU summit later this week.

Further support had been generated by concerns over a storm building in the Gulf of Mexico, which had led to the shut-in of production facilities.

However, subsequent forecasts that the storm was moving away from key offshore production areas served to limit upside pressure.   

($1 = €0.80)

By: James Dennis
+65 6780 4359

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