Oil prices up from seven month low

LONDON - The Associated Press

Crude futures have tumbled this week to multi-month lows on worries about a possible Spanish bailout.

World oil prices rebounded yesterday, mirroring European stock markets, after plunging overnight to a fresh seven-month low on demand fears linked to the eurozone debt crisis.

New York’s main contract, West Texas Intermediate crude for delivery in July added 38 cents to $88.20 a barrel, after diving in Asian trade to $87.42 -- the lowest level since October 24.

Brent North Sea crude for July rose 53 cents to $104 a barrel in London deals. The contract has plunged on Wednesday to $102.85, a level last reached in mid-December.

Crude futures have tumbled this week to multi-month lows on worries about a possible Spanish bailout, with sentiment also hit as the dollar soared to a near two-year peak against the European single currency.

The euro dived to another 23-month low point at $1.2358 in Asian trade on yesterday as investors were caught up with eurozone gloominess a day earlier.

Strong US dollar

The strong greenback makes dollar-priced oil more expensive for buyers using weaker currencies. In turn, that tends to hurt demand and dampen prices.

“Right now, the market is wide open. There is still scope for more downside pressure on prices if the bearish sentiment about the eurozone’s future keeps up,” said Nick Trevethan, senior commodities strategist at ANZ Research.

Spainish woes

Spain’s economic woes were sharply in focus as its 10-year borrowing rates approached the 7.0 percent mark considered too high for governments to be able to service their debts.

 Economists fear Madrid will have to seek an international bailout -- following Greece, Ireland and Portugal -- despite assurances from Prime Minister Mariano Rajoy.