Oil prices were lower in Asia today as Euro zone fears and a sharp spike in US crude inventories weighed on markets, analysts said.
New York’s main contract, light sweet crude for delivery in September, dipped 35 cents to $88.62 a barrel in the afternoon while Brent North Sea crude for September delivery fell 39 cents to $103.99.
“Events in Europe seem to be limiting the upside,” said Mr Nick Trevethan, senior commodities strategist for ANZ Research.
Dark clouds were gathering again after Spain sought French support yesterday in the face of its soaring borrowing costs, while a slump in German confidence and a worsening British recession exacerbated the situation.
Meanwhile, the Greek Prime Minister, Mr Antonis Samaras, warned on Tuesday that the recession in Athens was set to be much worse than expected with the economy shrinking by “more than seven per cent“.
Energy demand in the US was also raising red flags for oil traders, with stockpiles in the world’s biggest oil consumer spiking, said Mr Trevethan.
“US crude supply rose significantly overnight... the market had been looking for a fall,” he told AFP.
US crude inventories jumped 2.7 million barrels last week, data released by the Energy Information Administration showed.