Oil prices slide on Cyprus bailout strains

19th March 2013, Comments 0 comments

Crude oil prices slumped for a second day running on Tuesday as Cyprus' bailout saga had traders scrambling for cover.

Brent North Sea crude for delivery in May shed $1.41 to trade at $108.10 a barrel in late London deals, a day after striking a three-month low point at $107.78.

New York's main contract, light sweet crude for April, slid 92 cents to $92.82 a barrel.

"Both contracts fell sharply in late afternoon trading as concerns grew over Cyprus," said Fawad Razaqzada, an analyst at traders GFT Markets.

The Cypriot parliament on Tuesday opened a session in which MPs were to vote on a controversial bailout agreement with a troika of international lenders, as thousands of protesters gathered outside.

It was unclear if a vote would go ahead, however, after the ruling Disy party of President Nicos Anastasiades said it would abstain, and Sigma private television reported all other parties would also not take part.

"Oil markets are likely to remain volatile for the next few days (with) investors monitoring for any spillover of the developments in Cyprus to other eurozone nations," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.

Uncertainty about the vote comes despite changes by Cyprus to the terms of the the 10-billion-euro ($13 billion) deal sealed with eurozone partners at the weekend.

A revised plan, drafted Tuesday in response to an angry backlash at home and jitters that roiled global markets, sees a one-time levy being dropped on bank savings below 20,000 euros but retained at 6.75 percent on deposits of 20,000-100,000 euros -- and at 9.9 percent for amounts above 100,000 euros.

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© 2013 AFP

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