Oil down in Asia on Europe fears
SINGAPORE: Oil prices slipped in Asian trade Tuesday with markets weighed by economic and political uncertainty in Europe and a weaker euro, analysts said.
New York’s main contract, West Texas Intermediate crude for delivery in June was down 25 cents to $102.86 per barrel while Brent North Sea crude for June shed 13 cents to $118.58 in the afternoon.
“Oil edged lower… on pressure from revived concerns about a eurozone economic slump and political uncertainty,” said Phillip Futures in a market commentary.
“Uncertainty in France and the Netherlands, coupled with a grim economic outlook in the eurozone, prompted investors to desert the common currency,” it added.
A slide in the value of the euro makes dollar-priced crude more expensive, dampening demand.
Economic matters in the eurozone weighed on sentiment after data showed private sector activity sank at the fastest rate in five months in April, indicating a longer recession than previously thought.
Spain — one of the eurozone’s beleaguered economies — also plunged back into recession in the first quarter of 2012, the Bank of Spain said Monday.
On the political front, investors were spooked by the collapse of the Dutch government over a breakdown in budget talks, a day after French President Nicolas Sarkozy lost a first-round presidential vote to Socialist Francois Hollande.
“Those optimists who thought the eurozone would bounce back quickly from such a severe crisis which has brought with it deep budget cuts, mass unemployment and civil unrest are experiencing a major reality check,” said Justin Harper, market strategist at IG Markets Singapore.