23 October 2012 14:58 [Source: ICIS news]
LONDON (ICIS)--NYMEX light-sweet crude oil futures dropped by more than $2.00/bbl on Tuesday, pressured by economic woes in Spain and declining morale in the French manufacturing sector.
By 13:00 GMT, the front-month December NYMEX WTI contract fell to an intra-day low at $86.63/bbl, a loss of $2.02/bbl compared with the settlement on Monday. The contract then edged marginally higher to trade around $86.70/bbl.
At the same time the front-month December ICE Brent contract was trading around $108.35/bbl, having touched an intra-day low at $108.17/bbl, down by $1.27/bbl against Monday’s close.
Spain’s central bank said on Tuesday that the country’s economy shrank by 0.4% during the third quarter, less than previously expected. However, the market remained cautious because the Spanish government has yet to formally request external financial aid.
The European Central Bank has already offered to buy Spanish bonds to keep the country’s borrowing costs from rising further.
Additionally, five Spanish regions were downgraded overnight by Moody’s Investors Service, although Spain’s investment-grade ratings were kept unchanged.
In France, business morale in the manufacturing sector slumped to its lowest point in more than two years, further exacerbating the bearish sentiment lingering over the eurozone.
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