Oil dips to $104 on fresh euro fears
Brent crude slipped to $104 per barrel today as fears about the global economy returned to the forefront due to worries that Spain may not be able to avoid a costly sovereign bailout, which could impact on oil demand.
Riskier assets including equities and the euro fell on fears that Spain, the euro zone's fourth-largest economy, may need a lifeline from international lenders after two indebted regions sought financial assistance from the central government.
Brent crude was down $2.13 at $104.70 per barrel earlier today, after brushing an intra-day low of $104.54. Brent prices had posted a fourth straight weekly gain in the previous session.
US crude fell $2.06 to $89.77 per barrel.
"Oil prices had a good run up last week, so we are mostly seeing a bit of profit-taking happening with Spain back in focus," said Ben Le Brun, a markets analyst at OptionsXpress in Sydney.
"There is also a bit of nervousness in the market ahead of data coming out this week as things could change very quickly in the next 24 hours."
Traders are awaiting manufacturing data from China and Europe, due tomorrow, for further clues on the health of the global economy and its impact on oil demand.
A stronger dollar also pressured oil prices, which are priced in the US currency.
Further adding to softness in oil markets, US demand for crude oil, petrol and distillates fell in June from a year earlier, the industry group American Petroleum Institute said in a report.
The API attributed the drop to a slowing US economy.