Oil prices stable

May 02, 2012 | 08:11

(0) user say

Oil prices were narrowly mixed in muted trading on Tuesday as markets were closed in many countries for May Day holidays.

Oil prices were narrowly mixed in muted trading as markets were closed in many countries for May Day holidays.

New York's main contract, light sweet crude for delivery in June, fell 14 cents to $104.73 a barrel.

Brent North Sea crude for June edged up six cents to $119.53.

Expectations of a build-up in US crude inventories coupled with heightened worries over the economic state of the eurozone weighed on crude prices, said Jason Hughes, head of premium client management for IG Markets Singapore.

"The estimates coming in that US stockpiles would have increased yet again and also the uncertainty that still remains over the eurozone and the Spanish economy officially entering recession for the second time since 2009" hit crude prices, he told AFP.

An analyst poll forecast that US crude stockpiles would rise by 2.3 million barrels for the week ended April 27, representing another increase in inventories after a larger-than-expected spike the previous week.

The stockpile gains indicate flagging energy demand in the world's largest oil consumer, which is negative for oil prices.

Meanwhile, Spain's announcement on Monday that it had officially entered a recession after its economy contracted for the second straight quarter aggravated fears over the state of the troubled eurozone.

Investors fear that Spain could follow a Greek-style downward debt spiral and trigger chaos in the market, in turn ravaging global energy demand.

Doubts about Spain's ability to meet its deficit goals have been amplified by the plight of Spanish banks, many bogged down in bad loans after a property bubble collapsed in 2008.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional