Oil prices hovered near $103 a barrel Tuesday, April 17 in Asia as Europe’s debt crisis flared again – this time in Spain – possibly undermining demand for crude, AP reports.
Benchmark oil for May delivery was down 2 cents to $102.91 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 10 cents to settle at $102.93 in New York on Monday.
Brent crude for June delivery was down 22 cents at $118.46 per barrel in London.
Spanish bond yields jumped Monday as markets worried the country may require an international bailout to avoid a debt default. Most analysts are forecasting a mild recession in Europe this year, but renewed contagion from the continent’s debt crisis could further hurt economic growth.
“Economic conditions in the big developed economies remain weak and there is potential for further downward revisions to crude oil demand,” National Australia Bank said in a report. Investors are also mulling the impact of meetings last weekend about Iran’s nuclear program.
Talks among Iran and six world powers didn’t produce any concrete agreements, but negotiators said the tone was better than previous meetings, and the sides agreed to meet again on May 23.
Concern that a military strike by Israel and the U.S. against Iran’s nuclear facilities would disrupt global crude supplies has helped push crude up from $75 in October. Iranian crude output has fallen in recent months as the U.S. and Europe begin to impose economic sanctions on OPEC’s second-biggest producer.
“While the recent Iran talks were ‘constructive’, they did not offer much in the way of providing markets with any sense of supply certainty,” NAB said.
In other energy trading, heating oil was down 0.4 cent at $3.12 per gallon and gasoline futures slid 1.0 cent at $3.26 per gallon. Natural gas fell 0.4 cent at $2.01 per 1,000 cubic feet.