Investing.com - Crude oil futures were mildly lower during European morning trade on Thursday, as growing fears over an escalation of the debt crisis in the euro zone and disappointing Chinese trade data fuelled concerns over a slowdown in global oil demand.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD96.66 a barrel during European morning trade, easing down 0.15%.
It earlier fell by as much as 0.3% to trade at a session low of USD96.31 a barrel. Prices touched USD95.17 a barrel on Wednesday, the lowest since December 20, 2011.
Investors continued to monitor political developments in Greece, as the debt-laden country struggles to form a coalition government following weekend elections.
The leader of the leftist Syriza party, Alexis Tsipras gave up his attempt to form a new government on Wednesday, putting Greek Socialist leader Evangelos Venizelos in a position to make a last-ditch attempt to form a government on Thursday.
The political uncertainty fuelled fears that Greece will not have a government in place in time to secure its next tranche of international aid next month, as new elections look increasingly likely.
Meanwhile, growing concerns over the health of Spain’s banking sector were in focus, after the Bank of Spain received an official request late Wednesday to take a stake in Bankia, the country’s fourth-largest lender.
The yield on Spanish 10-year bonds rose above 6% in early European trade to hit the highest level since early December, reflecting investor concerns over holding riskier assets.
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.
Prices came under further pressure following the release of data showing Chinese exports and imports grew less-than-expected in April.
In a report, the Customs General Administration of China said the nation’s trade surplus widened to USD18.42 billion in April from USD5.35 in the previous month.
The data showed that exports rose by 4.9% in April from a year earlier, below expectations for growth of 9.1% and slowing from 8.9% in March.
Imports grew by a modest 0.4% in April, significantly below expectations of 12.5% and slowing sharply from 5.3% in the previous month.
Normally a widening trade surplus is considered a good thing, but April’s result appeared more related to a weakness in imports, fuelling concerns over a slowdown in the world’s second largest economy.
A deeper slowdown in China, the world’s second-biggest economy, would impair a global expansion that is already faltering because of Europe’s austerity measures.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, a larger-than-expected build in U.S. oil supplies last week is forcing traders to refocus on the supply and demand picture.
The U.S. Energy Department said in its weekly report that crude oil inventories rose by 3.7 million barrels last week to a total of 379.5 million barrels as of last week, the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
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 June delivery dipped 0.05% to trade at 113.14 a barrel, with the spread between the Brent and crude contracts standing at USD16.48.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD96.66 a barrel during European morning trade, easing down 0.15%.
It earlier fell by as much as 0.3% to trade at a session low of USD96.31 a barrel. Prices touched USD95.17 a barrel on Wednesday, the lowest since December 20, 2011.
Investors continued to monitor political developments in Greece, as the debt-laden country struggles to form a coalition government following weekend elections.
The leader of the leftist Syriza party, Alexis Tsipras gave up his attempt to form a new government on Wednesday, putting Greek Socialist leader Evangelos Venizelos in a position to make a last-ditch attempt to form a government on Thursday.
The political uncertainty fuelled fears that Greece will not have a government in place in time to secure its next tranche of international aid next month, as new elections look increasingly likely.
Meanwhile, growing concerns over the health of Spain’s banking sector were in focus, after the Bank of Spain received an official request late Wednesday to take a stake in Bankia, the country’s fourth-largest lender.
The yield on Spanish 10-year bonds rose above 6% in early European trade to hit the highest level since early December, reflecting investor concerns over holding riskier assets.
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.
Prices came under further pressure following the release of data showing Chinese exports and imports grew less-than-expected in April.
In a report, the Customs General Administration of China said the nation’s trade surplus widened to USD18.42 billion in April from USD5.35 in the previous month.
The data showed that exports rose by 4.9% in April from a year earlier, below expectations for growth of 9.1% and slowing from 8.9% in March.
Imports grew by a modest 0.4% in April, significantly below expectations of 12.5% and slowing sharply from 5.3% in the previous month.
Normally a widening trade surplus is considered a good thing, but April’s result appeared more related to a weakness in imports, fuelling concerns over a slowdown in the world’s second largest economy.
A deeper slowdown in China, the world’s second-biggest economy, would impair a global expansion that is already faltering because of Europe’s austerity measures.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Meanwhile, a larger-than-expected build in U.S. oil supplies last week is forcing traders to refocus on the supply and demand picture.
The U.S. Energy Department said in its weekly report that crude oil inventories rose by 3.7 million barrels last week to a total of 379.5 million barrels as of last week, the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
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 June delivery dipped 0.05% to trade at 113.14 a barrel, with the spread between the Brent and crude contracts standing at USD16.48.