Brent crude oil fell on Wednesday, pinned near 17-month lows, hit by worries over Spain’s high borrowing costs and prospects for global demand growth.
Brent oil for August delivery was down 68 cents at $95.08 per barrel by 1030 GMT. It fell as low as $94.86 earlier, near Tuesday’s trough of $94.44, its lowest since January, 2011.
US July crude, which expires on Wednesday, was down nine cents at $83.94 per barrel.
Expectations that the US Federal Reserve’s policy meeting may result in stimulus for the world’s largest economy failed to halt a slide in Brent, which has tumbled 22 percent this quarter, its biggest fall since late 2008.
“Oil has really decided it has no interest in the FOMC, it has not priced in any significant stimulus,” said David Morrison, analyst at GFT Global.
The US central bank will release a policy statement at the end of its two-day meeting later on Wednesday, followed by a briefing by Chairman Ben Bernanke at 1815 GMT.
“It must be because investors are looking ahead and seeing that the situation in Europe isn’t going to get any better, while the outlook for demand in the US is poor and China is slowing too,” Morrison said.
He added that there was little technical support for Brent crude above the $87.50-$88 per barrel level.
Fears that Spain’s soaring bond yields could eventually lead to an international bailout for Madrid further darkened an already bleak outlook for the euro zone.
Spain moved closer to becoming the largest euro zone country yet to be shut out of credit markets after paying a euro era record price to sell short-term debt, with yields on longer-term bonds also at unsustainable levels at above 7 percent.