Wednesday, July 25, 2012

Oil down in Asia as eurozone woes keep up

SINGAPORE: Oil prices fell in Asian trade Wednesday as persistent worries over the eurozone's debt crisis hit sentiment, analysts said.

New York's main contract, light sweet crude for September delivery, declined by 32 cents to $88.18 a barrel in afternoon trade and Brent North Sea crude for delivery in September fell 38 cents to $103.04.

Investors have been spooked by a deterioration in the long-running eurozone debt crisis as borrowing prices for Spain, the bloc's fourth biggest economy, struck a new high Tuesday, triggering concerns it may need a full bailout.

"Spanish bailout worries continue to plague markets... Clearly these interest rates are unsustainable and action will need to be taken internally or externally to restore some confidence in buying Spanish debt," said Justin Harper, market strategist with IG Markets Singapore.

Investor confidence was also dealt a blow after ratings agency Moody's threatened to cut Germany's coveted top credit rating amid fears the eurozone's difficulties could pull it apart.

Spain's borrowing costs for benchmark 10-year bonds rose above 7.5 percent, well above the figure that forced Greece, Ireland and Portugal to seek international rescues.

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