Investing.com - Crude oil futures held below USD80-per-barrel during European morning trade on Tuesday, amid fading hopes an upcoming summit of European leaders would yield meaningful results.
Persistent fears over a slowdown in global growth and its implications on oil demand further weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD79.16 a barrel during European morning trade, easing down 0.1%.
It earlier fell by as much as 0.6% to trade at a session low of USD78.72 a barrel. Prices touched and eight-month low of USD77.56 a barrel on June 22.
Markets were jittery ahead of the European Union summit due to begin on Thursday, amid skepticism that leaders would make progress on greater fiscal integration and allowing the bloc's rescue funds to buy government debt.
On Monday after German Chancellor Angela Merkel crushed any hopes that euro zone countries will eventually issue common Eurobonds to help indebted nations, calling such an idea “economically wrong” and “counterproductive”.
Meanwhile, Greece’s new finance minister was forced to resign, due to health issues, while Prime Minister Antonis Samaras said he would not be able to attend this week’s EU summit given that he had just undergone eye surgery.
Investors were also cautious after Moody’s ratings agency downgraded 28 Spanish banks late Monday, citing exposure to the ailing real estate market. The decision came after Spain formally requested up to EUR100 billion in rescue loans to recapitalize its struggling banks.
In addition, Cyprus became the fifth euro zone country to request financial help from Brussels, adding to concerns over the level of debt contagion in the single currency bloc.
There are worries that the region’s worsening sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
Meanwhile, ongoing concerns over the health of the global economy further weighed.
HSBC Holdings joined Citigroup in cutting growth forecasts for China. HSBC cut its forecast for China’s 2012 growth to 8.4% from 8.6%. That came a day after Citigroup lowered its estimate for China’s growth this year to 7.8% from 8.1%.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Losses were limited as oil drillers in the Gulf of Mexico, including Conoco Phillips and British Petroleum, shut about 44% of output in the Gulf as a precaution ahead of Tropical Storm Debby.
Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 20% of U.S. oil production.
Oil traders were also looking ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 0.7 million barrels.
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 August delivery added 0.3% to trade at 91.28 a barrel, with the spread between the Brent and crude contracts standing at USD12.12.
Prices fell to as low as USD88.49 a barrel on June 22, the lowest since December 20, 2010.
London-traded Brent prices are down nearly 29% since hitting an intraday high of USD128.38 on March 1, as an escalating debt crisis in the euro zone and worries over a deeper-than-expected slowdown in Chinese economic activity dragged prices lower.
Persistent fears over a slowdown in global growth and its implications on oil demand further weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD79.16 a barrel during European morning trade, easing down 0.1%.
It earlier fell by as much as 0.6% to trade at a session low of USD78.72 a barrel. Prices touched and eight-month low of USD77.56 a barrel on June 22.
Markets were jittery ahead of the European Union summit due to begin on Thursday, amid skepticism that leaders would make progress on greater fiscal integration and allowing the bloc's rescue funds to buy government debt.
On Monday after German Chancellor Angela Merkel crushed any hopes that euro zone countries will eventually issue common Eurobonds to help indebted nations, calling such an idea “economically wrong” and “counterproductive”.
Meanwhile, Greece’s new finance minister was forced to resign, due to health issues, while Prime Minister Antonis Samaras said he would not be able to attend this week’s EU summit given that he had just undergone eye surgery.
Investors were also cautious after Moody’s ratings agency downgraded 28 Spanish banks late Monday, citing exposure to the ailing real estate market. The decision came after Spain formally requested up to EUR100 billion in rescue loans to recapitalize its struggling banks.
In addition, Cyprus became the fifth euro zone country to request financial help from Brussels, adding to concerns over the level of debt contagion in the single currency bloc.
There are worries that the region’s worsening sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
Meanwhile, ongoing concerns over the health of the global economy further weighed.
HSBC Holdings joined Citigroup in cutting growth forecasts for China. HSBC cut its forecast for China’s 2012 growth to 8.4% from 8.6%. That came a day after Citigroup lowered its estimate for China’s growth this year to 7.8% from 8.1%.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Losses were limited as oil drillers in the Gulf of Mexico, including Conoco Phillips and British Petroleum, shut about 44% of output in the Gulf as a precaution ahead of Tropical Storm Debby.
Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 20% of U.S. oil production.
Oil traders were also looking ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 0.7 million barrels.
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 August delivery added 0.3% to trade at 91.28 a barrel, with the spread between the Brent and crude contracts standing at USD12.12.
Prices fell to as low as USD88.49 a barrel on June 22, the lowest since December 20, 2010.
London-traded Brent prices are down nearly 29% since hitting an intraday high of USD128.38 on March 1, as an escalating debt crisis in the euro zone and worries over a deeper-than-expected slowdown in Chinese economic activity dragged prices lower.