Brent below $118 as euro zone, dollar weigh

Wed Apr 18, 2012 7:18am EDT
 
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By Jessica Donati

LONDON (Reuters) - Brent crude futures slipped below $118 on Wednesday as a stronger dollar and fears about the euro zone weighed on prices, while the prospect of further talks between Iran and the West continued to ease pressure on the market.

The dollar was up 0.4 percent against a basket of currencies on Wednesday, helping to push Brent over $1 lower during the session to a low of $117.60 a barrel.

Worries about the euro zone debt crisis flaring up again persisted on Wednesday, as data showed bad loans at Spanish banks were at their highest level since October 1994. The report underscored the challenges still facing the region's fourth-largest economy.

"Now that we have finished with Greece, the focus is now on Spain. The growth picture is still mixed, with marginally more positive data emerging from the U.S. than the EU," said Thorbjørn Bak Jensen, an oil analyst at Global Risk Management, citing strength in Germany as a sign the outlook for the euro zone was improving.

Brent June crude was down 98 cents at $117.80 a barrel at 1100 GMT, after settling little changed in the previous session. Brent tumbled 2 percent at the start of the week.

May crude shed 2 cents to trade at $104.18, after settling at its highest close since April 2. The May contract expires on Friday.

Fears about the euro zone debt crisis flaring up again eased on Tuesday after a Spanish bill auction was met with strong demand and further signs of growth emerged from Germany.

The IMF offered a cautiously optimistic view on global growth, which it said is slowly improving as the U.S. recovery gains traction and dangers from Europe recede.   Continued...

 
Petrol prices are advertised at a petrol station in Ronda, near Malaga, southern Spain March 4, 2011. REUTERS/Jon Nazca