The prices on oil declined to near $94 a barrel in Asia adding a two-week sell-off, which marked a record decrease in five months in the mid of rising concern about Europe’s debt crisis.
At midday Singapore time in electronic trading on the New York Mercantile Exchange, benchmark oil dropped down 44 cents to $94.34 a barrel for June delivery. It is the lowest declination noted down since December. On 14 May 2012, the contract came down $1.35 to settle at $94.78 in New York.
Brent crude fell down 45 cents at $110.55 per barrel in London scheduled for July delivery.
Because of decelerating economic activity in the world, especially the U.S. and China, the two biggest consumers of oil, crude was down 11 percent from $106 tag in May.
Many investors are afraid that Greece’s inability to form a government subsequent to the recent elections, can aggravate the country’s debt crisis and deep recession as well as weaken the confidence throughout Europe.
In a report, energy trader and consultant Ritterbusch and Associates said: “Greece’s struggle to form a new government has moved to centre stage,” as well as further pointed out: “The possibility of a significant economic slowdown in European economic activity is prompting contagion fears.”
Most of the oil investors are taking their cues from global stock markets, which have sunk so far in the month of May. On Monday, the Dow Jones industrial average fell 1 percent although many Asian stock markets were down Tuesday.
In other energy trading, heating oil dropped 1.2 cents to $2.92 per gallon and gasoline futures fell 0.7 cents to $2.95 per gallon. Natural gas declined 1.6 cents at $2.49 per 1,000 cubic feet.
Image Credit: Creative Commons/United States Navy