Oil extends losses as eurozone voters reject austerity cuts - Source Zawya News

Oil extends losses as eurozone voters reject austerity cuts

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SINGAPORE, May 07, 2012 (AFP) - Oil prices extended losses in Asian trade Monday, as French and Greek election results stoked investor concerns over the eurozone debt crisis, while disappointing US economic data also weighed.

New York's main contract, West Texas Intermediate crude for delivery in June stayed below the psychological $100 threshold, falling $1.92 to $96.57 a barrel in morning trade.

Brent North Sea crude for June shed $1.48 to $111.70.

"Oil has gone down sharply because the election results have raised concerns about whether the eurozone can beat the debt crisis," said Nick Trevethan, senior commodities strategist at ANZ Research.

"There is a worry about a rejection of austerity and people are also worried about a eurozone recession," he added.

Trevethan said poor US economic data released last week added to the gloom in the market.

French and Greek voters showed their lack of enthusiasm for belt tightening by flocking to candidates and political parties who have called for an easing of austerity measures in weekend elections, sparking concerns that the eurozone debt crisis might resurface.

In France, president-elect Francois Hollande warned fellow European leaders he would push ahead with his vow to refocus EU fiscal efforts from austerity to growth. Hollande defeated incumbent Nicolas Sarkozy.

Analysts said Hollande's victory underscored the politically difficult task of selling austerity measures designed to tackle eurozone nations' huge debts, with the incoming leader advocating economic growth over deep public spending cuts.

Meanwhile, Greek election results doused hopes that Athens will stick to its austerity pledges as parties opposing more cuts won almost 60.0 percent support in Sunday's general election.

Debt-ridden Greece had agreed to the cuts in exchange for massive bail-out funds.

Crude futures were also weighed down mostly disappointing US economic data released last week, analysts said.

Official non-farm payroll data released Friday showed the world's biggest economy generated only 115,000 net new jobs last month, less than half the pace at the beginning of the year, although the unemployment rate dipped slightly to 8.1 percent from 8.2 percent.

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