Forexpros – Crude oil futures fell in Asian trading on Tuesday after yields in Spanish bond auctions soared on fears the debt crisis is escalating in Spain, which could further dampen the European economy and crimp fuel demand.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD83.44 a barrel on Tuesday, down 0.19%, off from a session high of USD83.49 and up from an earlier session low of USD83.19.
Conservative political party New Democracy emerged victorious in Greek elections on Sunday, which fueled hopes that Greece will stick with the euro.
Yet by Monday and into Tuesday in Asian trading, markets quickly began to worry over Spain, where borrowing costs soared.
The yield on the Spanish 10-year note soared above 7% on Monday on concerns Spain will run into increasing problems financing itself.
Yields at around 7% tend to depict a country in need of a bailout, similar to ones arranged for Greece, Ireland and Portugal.
Eurozone finance ministers recently arranged a EUR100 billion bailout facility for Spain to use to recapitalize its banks, but talk the country itself will need rescuing continued to grow.
Meanwhile in Italy, the yield on Italian 10-year bonds hit 6.10% on concerns that sovereign debt contagion was headed towards the eurozone’s fourth largest economy.
Economic concerns out of Europe kept Iranian fears at bay.
A European ban on Iranian crude imports is due to take effect on July 1.
Delegates from the U.S., U.K., China, France, and Russia and Germany recently wrapped up talks with Iranian officials to diffuse a standoff involving Iran’s nuclear plans, with a first round taking place in Baghdad and a second round ending in Russia.
The West accuses Iran of developing a nuclear weapons program, a charge Tehran denies.
On the ICE Futures Exchange, Brent oil futures for August delivery were down 0.04% and trading at USD95.73 a barrel, up USD12.29 from its U.S. counterpart.
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