Investing.com - Crude and Brent oil futures inched higher during European morning trade on Thursday, but remained close to multi-month lows hit in the previous session as investors remained focused on Spain's deteriorating financial situation ahead of the release of U.S. government data on oil supplies.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD88.05 a barrel during European morning trade, adding 0.23%.
It earlier rose by as much as 0.35% to trade at a session high of USD88.14 a barrel. Prices touched USD 87.28 a barrel on Wednesday, the lowest since October 24, 2011.
Oil prices plunged by more than 3% on Wednesday, as rising borrowing costs for Spain and Italy and indications that Greece's anti-austerity parties were gaining in opinion polls ahead of elections in June roiled market sentiment.
Global equities and commodity markets have been rattled in recent weeks as fears over the possibility of a Greek exit from the euro zone and growing concerns Spain will be the next euro zone member to require a bailout dominated market sentiment.
For the month, New York-traded crude oil is down 16%, the biggest drop since December 2008.
Appetite for riskier assets came under pressure amid sustained concerns over the situation in Spain, where rising bond yields, the growing costs of bank rescues and a recession hit economy fuelled fears that Madrid will be forced to seek an international bailout.
The yield on Spanish 10-year bonds climbed to 6.7% on Wednesday, approaching the critical 7% threshold that preceded bailouts in Greece, Ireland and Portugal. Similar-maturity Italian yields increased to 5.98%.
Elsewhere, concerns over the outcome of Greek elections mounted after an opinion poll showed anti-austerity party Syriza in the lead ahead of the June 17 vote, fuelling concerns that the country will reject the terms of its bailout agreement and be forced out of the euro area.
There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil. The euro zone accounted for nearly 12% of global oil consumption in 2010, according to data from British Petroleum.
Meanwhile, oil traders were looking ahead to the U.S. Energy Information Administration’s closely-watched weekly report on U.S. stockpiles of crude and refined products later in the day.
The report was expected to show that U.S. crude oil stockpiles rose by 0.50 million barrels last week to the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
The report comes out a day later than usual due to the U.S. Memorial Day holiday on Monday.
After markets closed Wednesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 0.35 million barrels last week, defying expectations for an increase of 0.60 million barrels.
Also Thursday, the U.S. was to release data on first quarter gross domestic product figures.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery rose 0.3% to trade at 103.76 a barrel, with the spread between the Brent and crude contracts standing at USD15.71.
On Wednesday, prices touched USD102.89 a barrel, the lowest since December 19. For the month, London-traded Brent crude lost 13%, the most since May 2010.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD88.05 a barrel during European morning trade, adding 0.23%.
It earlier rose by as much as 0.35% to trade at a session high of USD88.14 a barrel. Prices touched USD 87.28 a barrel on Wednesday, the lowest since October 24, 2011.
Oil prices plunged by more than 3% on Wednesday, as rising borrowing costs for Spain and Italy and indications that Greece's anti-austerity parties were gaining in opinion polls ahead of elections in June roiled market sentiment.
Global equities and commodity markets have been rattled in recent weeks as fears over the possibility of a Greek exit from the euro zone and growing concerns Spain will be the next euro zone member to require a bailout dominated market sentiment.
For the month, New York-traded crude oil is down 16%, the biggest drop since December 2008.
Appetite for riskier assets came under pressure amid sustained concerns over the situation in Spain, where rising bond yields, the growing costs of bank rescues and a recession hit economy fuelled fears that Madrid will be forced to seek an international bailout.
The yield on Spanish 10-year bonds climbed to 6.7% on Wednesday, approaching the critical 7% threshold that preceded bailouts in Greece, Ireland and Portugal. Similar-maturity Italian yields increased to 5.98%.
Elsewhere, concerns over the outcome of Greek elections mounted after an opinion poll showed anti-austerity party Syriza in the lead ahead of the June 17 vote, fuelling concerns that the country will reject the terms of its bailout agreement and be forced out of the euro area.
There are worries that the region’s sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil. The euro zone accounted for nearly 12% of global oil consumption in 2010, according to data from British Petroleum.
Meanwhile, oil traders were looking ahead to the U.S. Energy Information Administration’s closely-watched weekly report on U.S. stockpiles of crude and refined products later in the day.
The report was expected to show that U.S. crude oil stockpiles rose by 0.50 million barrels last week to the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
The report comes out a day later than usual due to the U.S. Memorial Day holiday on Monday.
After markets closed Wednesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 0.35 million barrels last week, defying expectations for an increase of 0.60 million barrels.
Also Thursday, the U.S. was to release data on first quarter gross domestic product figures.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery rose 0.3% to trade at 103.76 a barrel, with the spread between the Brent and crude contracts standing at USD15.71.
On Wednesday, prices touched USD102.89 a barrel, the lowest since December 19. For the month, London-traded Brent crude lost 13%, the most since May 2010.