Oil slides on eurozone, US demand worries

AP FILE PHOTO

SINGAPORE–Oil prices fell to a seven-month low in Asian trade Friday as eurozone debt worries and signs of faltering demand in the United States dragged down crude markets, analysts said.

New York’s main contract, West Texas Intermediate (WTI) crude for delivery in July, was down five cents to $86.48 per barrel while Brent North Sea crude for July shed 16 cents to $101.71 in the afternoon.

WTI crude had on Thursday plunged $1.29 to $86.53, its lowest closing level since October 20, while Brent crude shed $1.60 to hit a five-month low of $101.87.

The declines in both contracts in the past week capped the worst month for oil prices since December 2008, Dow Jones Newswires reported.

Current WTI prices are down around $19.00, or 18 percent, from their close on April 2 — the first trading day of last month. Brent has plunged nearly $24.00, or 18 percent, over the same period.

“Oil prices continued to fall extremely heavily… At the moment, sentiment seems to be pricing in a dark future of major economic discontinuities,” said Barclays Capital in a commentary.

The oil market has been pounded in recent days along with equity markets amid fears over Spain’s troubled banking sector.

Demand has also been hurt by the plunging euro, making dollar-priced crude more costly for eurozone countries, denting demand and helping push prices lower.

Concerns were further exacerbated by weak US economic and jobs numbers as well as the weekly oil stockpiles report showing an increase of 2.2 million barrels.

Stockpiles in the United States — the world’s largest oil-consuming economy — now stand at the highest level in 22 years for this time of the year.