Oil hovers below $93 after sharp 2-week sell-off
SINGAPORE – Oil prices hovered below $93 a barrel Friday in Asia, pausing after the latest twists in Europe's debt crisis triggered a sharp two-week selloff.
Benchmark oil for June delivery was up 4 cents to $92.60 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $92.56 in New York on Thursday.
Brent crude for July delivery was up 11 cents at $107.60 per barrel in London.
Crude has plunged about 13 percent from $106 two weeks ago because of expectations Europe's debt crisis will slow the global economy and reduce demand for fuel.
On Thursday, rating agency Moody's downgraded its credit ratings on 16 Spanish banks while a newspaper reported depositors were rushing to withdraw their money from Bankia, a troubled Spanish bank that was effectively nationalized just one week ago.
Investors are also closely watching the U.S. economy, which has shown signs of uneven growth in recent months. The government said Wednesday that crude inventories rose again last week to their highest since 1990.
"The oil market remains highly sensitive to any negative macroeconomic news, particularly with stockpiles at 22-year highs," energy trader and consultant Ritterbusch and Associates said in a report.
A sustained drop in crude should eventually ease gasoline prices, which would slow global inflation and allow policymakers to implement stimulus measures or loosen monetary policy to boost economic growth.
In other energy trading, heating oil was up 0.4 cent at $2.86 per gallon and gasoline futures slid 0.7 cent at $2.81 per gallon. Natural gas rose 3.3 cents at $2.63 per 1,000 cubic feet.
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