Oil down in Asia on Europe fears

Published April 24, 2012

Oil edged lower after rising in the early hours over Eurozone recession fears. - File photo

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.

 

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.