Oil prices fell yesterday on fresh worries about the Eurozone debt crisis after leadership changes in France and particularly Greece underscored uncertainty about austerity and growth, analysts said.
Expectations of an increase in US crude stockpiles, which would indicate weaker energy demand, also contributed to bearish market sentiment. New York's main contract, West Texas Intermediate (WTI) crude for delivery in June fell 93 cents to $97.01 a barrel after striking a four-month low of $95.34 a barrel on Monday.
Brent North Sea crude for June slid $1.18 to $111.98 a barrel in London afternoon trading, and a day after hitting a three-month low point of $111.25. "European election results revived worries about the eurozone debt crisis, reinforcing anxiety about anaemic economic growth and petroleum demand," said Phillip Futures in a market commentary.
The results in France and Greece "raised doubts about the region's ability to proceed with austerity measures seen as crucial to addressing soaring debt and a contracting economy," it added. Voters in both countries displayed their discontent with austerity measures by flocking to candidates and political parties which have called for an easing of belt tightening in the embattled 17-nation euro bloc.
In France, Socialist Party candidate Francois Hollande ousted President Nicolas Sarkozy, becoming the first socialist in 17 years to lead the country. In Greece, mainstream parties that supported an EU-International Monetary Fund bailout of the debt-strapped country lost control of parliament.
Oil prices were also facing downside pressure from expectations of a spike in US crude stockpiles for the seventh consecutive week, indicating faltering demand in the world's top oil user, according to analysts. The weekly inventory report from the US Energy Department is due today.
