SINGAPORE: Oil extended losses in Asian trade Tuesday, as the continued political stalemate in Greece as well as banking problems in Italy and Spain drove new fears about the strength of the eurozone.

New York's main contract, West Texas Intermediate (WTI) crude for delivery in June was down 47 cents to $94.31 per barrel while Brent North Sea crude for June shed 57 cents to $111.00 in morning trade.

On Monday, WTI crude hit its lowest intra-day level since December 19 at $93.65, while Brent crude also hit a four-month low of $110.04 before both contracts rebounded.

“The new twist in the eurozone crisis has pushed down the commodity markets with oil among the biggest casualties,” said Justin Harper, market strategist at IG Markets Singapore.

“There's plenty more downside risk from the fears of contagion for other weak eurozone economies, namely Spain and Italy,” he said in a commentary.

New elections in Greece now look inevitable as the country's political parties on Monday again failed to form a government that would implement the painful European Union-International Monetary Fund bailout terms.

The country has been in a political deadlock since May 6 elections when an anti-austerity backlash stripped the parliamentary majority of parties that backed the bailout programme and its debt-cutting measures.

Investor worries about the financial future of the eurozone was also exacerbated by an overnight rise in Spanish bond yields as well as a credit rating downgrade of 26 Italian banks by rating agency Moody's.

Crude prices are also under pressure after major producer Saudi Arabia indicated that global crude stocks were likely to increase ahead of an anticipated seasonal rebound in demand starting from July.

“With supplies more than ample and negative cues in the global economy sapping demand, prices look set to remain under pressure,” said Simon Denham, the chief executive of Capital Spreads.