Oil traded near a seven-month low inNew York as a drop in German business confidence and disagreement between European leaders on joint bond sales fanned concern that the region will fail to resolve its debt crisis.
West Texas Intermediate futures were little changed, having fallen below $90 a barrel yesterday for the first time since November. German business optimism fell more than economists forecast in May as speculation that Greece might leave the euro area clouded the economic outlook. European leaders clashed over joint debt sales as they called on Greece to stick with budget cuts and offered no immediate relief for recession-wrackedSpain.
“There are worries about what is happening in the euro zone. The outlook is still very low and we are yet to reach a conclusion,” said Thina Margethe Saltvedt, an analyst at Nordea Bank AB (NDA) in Oslo. “As the uncertainty drags on, investors are waiting a bit before coming into the market and that’s why things have been drifting lower.”
Crude for July delivery on the New York Mercantile Exchangewas at $89.92 a barrel, up 2 cents, at 9:10 a.m. London time, paring an earlier gain of as much as 91 cents. The contract yesterday slid 2.1 percent to $89.90, the lowest close since Oct. 21. Prices have fallen 8.7 percent this year.
Brent oil for July settlement was at $105.17 a barrel, down 39 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $15.24, compared with $15.66 yesterday.
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