Oil mixed as Italy casts pall over markets

10th November 2011, Comments 0 comments

World oil prices diverged on Thursday as persistent doubts over the eurozone's debt crisis, and in particular the plight of Italy, cast a pall over markets.

Brent North Sea crude for delivery in December fell 83 cents to $113.14 a barrel in London morning trade.

New York's main contract, light sweet crude for December, added 90 cents to $96.64 a barrel, lifted by indications of strengthening demand in top oil consumer the United States.

"Oil prices are again lower on continuing concerns over the eurozone," said Andrew Matharu, head of oil and gas at brokerage Westhouse Securities.

Crude futures had dived on Wednesday as the market fretted over heightened economic turmoil in Europe, and IMF chief Christine Lagarde's warning of a potential "downward spiral" in the global economy.

Italy's borrowing costs soared above the key 7.0-percent level on Wednesday, sparking fears that the eurozone crisis could dent global energy demand.

Traders on Thursday also reacted to news that the International Energy Agency had cut its oil demand forecast.

The IEA revised down expected global oil demand slightly by 70,000 barrels per day this year and by 20,000 barrels next year after unexpectedly low third-quarter demand data from the United States, China and Japan.

It also warned that the debt crisis, tension over Iran, flagging growth and the northern hemisphere winter were disorientating oil markets.


© 2011 AFP

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