London/Singapore: Oil fell after a rally fuelled by victory of pro-bailout parties in Greece lost steam
Brent crude futures hit a fresh 16-month low at $94.44 a barrel on
Tuesday on slack demand due to fears about the slowing the euro zone
economy ahead of Spanish bond sales.
Brent extended losses after falling $1 to $95.05 a barrel. At 0814 GMT, Brent was down $1.18 at $94.87 a barrel.
Oil, along with other commodities, fell on Monday after an initial rally fuelled by the victory of pro-bailout parties in Greece lost steam, as Spain’s surging bond yields raised concern the country may need a full-blown bailout.
“The Greek election result gave the market a brief respite, that was it, now investors are clearly focused on Spanish government bond yields,” said Michael Creed, an economist at National Australia Bank.
Brent crude, which is down around 25% since hitting a peak above $128 in early March, was up 8 cents at $96.13 per barrel by 0404 GMT.
It hit a session low of $95.80, not far from Monday’s low of $95.38 — its weakest since January 2011.
US July crude, which expires on Wednesday, slipped 7 cents to $83.20 per barrel.
Uncertainty in the market, with Spain's borrowing costs taking centrestage now, will likely keep volatility high.
Yield on Spanish 10-year bonds hit a fresh high above the unsustainable 7% mark on Monday. Greece, Ireland and Portugal were forced to seek international bailouts soon after their 10-year bond yields rose above 7%.
“More expensive Spanish debt costs potentially bring forward the time when the government will need to seek help and draw down firewall buffers to meet ongoing commitments,” Ric Spooner, chief market analyst with CMC Markets, said in a note to clients.
Investors are now looking for fresh trading cues from the US Federal Reserve’s policy meeting and the China flash manufacturing PMI from HSBC this week.
The US central bank’s two-day policy meeting, which kicks off later in the day, will be watched closely for any indication that the Fed will roll out another round of monetary easing to combat a slowing recovery.
That would be good news for commodities, as it boosts market liquidity in the short term, and also builds fuel demand as the stimulus works its way into the economy.
Six world powers and Iran resumed talks in Moscow on Tuesday after making little headway on their first day of talks on Monday on how to end the dispute over Tehran's nuclear program me.
In a first, BPCL pays for Iranian oil in rupees
New Delhi: Bharat Petroleum Corp has made its first payment for Iranian oil in rupees, two industry sources said on Tuesday, becoming the first refiner to use a payment channel that skirts tightening Western sanctions on Iran’s trade.
India is Iran’s second-largest oil buyer, but has struggled to find ways to pay for the oil as Western sanctions curb international financial payments destined for Tehran’s coffers. Since December 2010, refiners in India have been using Turkey’s Halkbank to pay their annual oil import bill of more than $10 billion, after a previous payment channel was blocked.
Brent extended losses after falling $1 to $95.05 a barrel. At 0814 GMT, Brent was down $1.18 at $94.87 a barrel.
Oil, along with other commodities, fell on Monday after an initial rally fuelled by the victory of pro-bailout parties in Greece lost steam, as Spain’s surging bond yields raised concern the country may need a full-blown bailout.
“The Greek election result gave the market a brief respite, that was it, now investors are clearly focused on Spanish government bond yields,” said Michael Creed, an economist at National Australia Bank.
Brent crude, which is down around 25% since hitting a peak above $128 in early March, was up 8 cents at $96.13 per barrel by 0404 GMT.
It hit a session low of $95.80, not far from Monday’s low of $95.38 — its weakest since January 2011.
US July crude, which expires on Wednesday, slipped 7 cents to $83.20 per barrel.
Uncertainty in the market, with Spain's borrowing costs taking centrestage now, will likely keep volatility high.
Yield on Spanish 10-year bonds hit a fresh high above the unsustainable 7% mark on Monday. Greece, Ireland and Portugal were forced to seek international bailouts soon after their 10-year bond yields rose above 7%.
“More expensive Spanish debt costs potentially bring forward the time when the government will need to seek help and draw down firewall buffers to meet ongoing commitments,” Ric Spooner, chief market analyst with CMC Markets, said in a note to clients.
Investors are now looking for fresh trading cues from the US Federal Reserve’s policy meeting and the China flash manufacturing PMI from HSBC this week.
The US central bank’s two-day policy meeting, which kicks off later in the day, will be watched closely for any indication that the Fed will roll out another round of monetary easing to combat a slowing recovery.
That would be good news for commodities, as it boosts market liquidity in the short term, and also builds fuel demand as the stimulus works its way into the economy.
Six world powers and Iran resumed talks in Moscow on Tuesday after making little headway on their first day of talks on Monday on how to end the dispute over Tehran's nuclear program me.
In a first, BPCL pays for Iranian oil in rupees
New Delhi: Bharat Petroleum Corp has made its first payment for Iranian oil in rupees, two industry sources said on Tuesday, becoming the first refiner to use a payment channel that skirts tightening Western sanctions on Iran’s trade.
India is Iran’s second-largest oil buyer, but has struggled to find ways to pay for the oil as Western sanctions curb international financial payments destined for Tehran’s coffers. Since December 2010, refiners in India have been using Turkey’s Halkbank to pay their annual oil import bill of more than $10 billion, after a previous payment channel was blocked.
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