Investing.com - Crude oil futures held below USD80-per-barrel during European morning trade on Wednesday, as investors remained cautious ahead of Thursday’s key European Union summit amid fading hopes for a meaningful result.
Oil traders were also looking forward to a supply report from the U.S. later in the day to gauge the strength of oil demand in the world’s largest oil consumer.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD79.20 a barrel during European morning trade, easing down 0.2%.
It earlier fell by as much as 0.55% to trade at a session low of USD78.97 a barrel. Prices touched and eight-month low of USD77.56 a barrel on June 22.
Market sentiment remained fragile ahead of an EU summit due to begin on Thursday, amid worries the talks will not result in any effective steps to strengthen fiscal integration and allow the euro zone’s rescue funds to buy government debt.
Earlier in the week, German Chancellor Angel Merkel quashed hopes that the euro zone could issue joint euro bonds, saying the idea was "economically wrong" and "counterproductive."
Meanwhile, the yield on Spanish 10-year government bonds was at 6.87%, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.
Moody’s ratings agency downgraded 28 Spanish banks earlier in the week, after the country formally requested up to EUR100 billion to recapitalize its struggling banking sector.
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.
Oil traders were also looking ahead to the U.S. Energy Information Administration’s closely-watched weekly report on U.S. stockpiles of crude and refined products later in the day.
The report was expected to show that U.S. crude oil stockpiles fell by a modest 0.45 million barrels last week.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 0.5 million barrels last week, confounding expectations for a decline of 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 shed 0.6% to trade at 92.47 a barrel, with the spread between the Brent and crude contracts standing at USD13.27.
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 28% 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.
Oil traders were also looking forward to a supply report from the U.S. later in the day to gauge the strength of oil demand in the world’s largest oil consumer.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD79.20 a barrel during European morning trade, easing down 0.2%.
It earlier fell by as much as 0.55% to trade at a session low of USD78.97 a barrel. Prices touched and eight-month low of USD77.56 a barrel on June 22.
Market sentiment remained fragile ahead of an EU summit due to begin on Thursday, amid worries the talks will not result in any effective steps to strengthen fiscal integration and allow the euro zone’s rescue funds to buy government debt.
Earlier in the week, German Chancellor Angel Merkel quashed hopes that the euro zone could issue joint euro bonds, saying the idea was "economically wrong" and "counterproductive."
Meanwhile, the yield on Spanish 10-year government bonds was at 6.87%, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.
Moody’s ratings agency downgraded 28 Spanish banks earlier in the week, after the country formally requested up to EUR100 billion to recapitalize its struggling banking sector.
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.
Oil traders were also looking ahead to the U.S. Energy Information Administration’s closely-watched weekly report on U.S. stockpiles of crude and refined products later in the day.
The report was expected to show that U.S. crude oil stockpiles fell by a modest 0.45 million barrels last week.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 0.5 million barrels last week, confounding expectations for a decline of 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 shed 0.6% to trade at 92.47 a barrel, with the spread between the Brent and crude contracts standing at USD13.27.
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 28% 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.