Crude-oil prices are down as worries about the Eurozone debt swings from Italy to Spain and maybe France. Futures prices have been trending down all morning, after yesterday’s surge over the $100 mark.
Fears about the survival of the Eurozone and an era of austerity multiplied after a 10-year bond sale by Spain and France left both countries with markedly higher borrowing costs, Reuters reports.
Investors are concerned that a wave of bank failures is on the way. That would curtail spending in the Eurozone and cut energy demand.
“People are spooked by the Spanish bond yield and the crisis seems to be escalting, pushing most markets lower,” said Simon Wardell, an oil analyst at Global Insight.
Prices settled at $102.59 yesterday, the highest level since May 31, after Enbridge Inc. and Enterprise Products Partners LP said they will reverse the direction of the Seaway pipeline, adding an outlet to transport oil from the central U.S. and Canada to the coast of the Gulf of Mexico.
However the economic news was more encouraging in the U.S today. The government said the number of people seeking unemployment benefits fell last week to the lowest level since April, suggesting that layoffs are easing.