SINGAPORE, May 17 (AP/UNB) — Oil prices hovered near $93 a barrel Thursday in Asia as traders mulled whether concern over Europe's debt crisis justifies extending a sharp sell-off during the last two weeks.
Benchmark oil for June delivery was up 26 cents to $93.07 a barrel at late morning Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.17 to settle at $92.81 in New York on Wednesday.
Brent crude for July delivery was down 46 cents at $109.29 per barrel in London.
Crude has plummeted about 12 percent from $106 two weeks ago amid investor worries that economic growth in the U.S. and China will slow more than previously expected. This week, political turmoil in Greece and growing anti-austerity sentiment in Europe have raised fears of a debt default and economic recession, which would undermine crude demand.
Some analysts say a slowly improving U.S. economy and signs of growing oil demand in developing countries should keep the crude price from collapsing further.
"A drastic weakening of sentiment brought oil prices down sharply, with sovereign debt fears a key element in a mounting loss of faith in economic, and hence demand, prospects," Barclays said. "Crude oil prices may well remain capped on the upside in the next few weeks by fears of major economic upheavals."
"However, given the actual economic and oil demand picture, Brent prices are more likely to remain protected around $110 rather than attempting to break through to a more extreme downside," Barclays said.
Should crude continue to fall or at least maintain the recent pullback, it should translate to lower prices for oil products such as gasoline, which would ease global inflation pressures and give policymakers more room to implement stimulus measures or loosen monetary policy to boost economic growth.
In other energy trading, heating oil was down 1.2 cents at $2.89 per gallon and gasoline futures slid 1.5 cents at $2.85 per gallon. Natural gas rose 1 cent at $2.63 per 1,000 cubic feet.