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Crude oil futures fall as Spain bond yields hit euro-era highs


Gasoline prices are displayed at an Aral gas station on April 1, 2012 in Berlin, Germany. The cost of filling up should fall as oil prices decline.


Adam Berry

Oil prices fell today along with global shares after Spanish bond yields shot to euro-era highs as concerns about the country’s debt-stricken banking system overshadowed a positive election result in Greece, the Associated Press reported.

Crude oil futures for July delivery fell $1.04, or 1.2 percent, to $83.01 a barrel in New York, MarketWatch reported.

Brent August crude fell $1.48 to $96.13 a barrel.

Initial relief at the Greek election result on Sunday, which saw the pro-austerity New Democracy party clinch a narrow victory, was quickly replaced with fears about the Spanish economy, the fourth largest in the euro zone, Reuters said.

More from GlobalPost: Greece: Center right New Democracy party declares victory

Madrid agreed last week to an international bailout of up to $100 billion euros ($125.8 billion) for its stricken banking sector, but investors are worried about whether that will be enough to resolve its problems.

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A central bank report showing bad loans held by Spanish banks hit an 18-year high in April only served to fuel these concerns, the Wall Street Journal reported.

According to MarketWatch, the yield on Spain’s 10-year bond surged past seven percent to the highest level since the creation of the euro. Yields on Italian 10-year bonds were above six percent.

Higher yields reflect fears that Spain and Italy could default on their debts, which could spark a Europe-wide recession and further erode global growth.

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