Oil hovers below $73 in Asia as traders mull impact on Europe crisis on global crude demand

Oil hovers below $73 as traders eye Europe economy

SINGAPORE — Oil prices hovered below $74 a barrel Tuesday in Asia, a calm start to June after the Europe debt crisis fueled wild fluctuations in crude last month.

Benchmark crude for July delivery was down 6 cents at $73.90 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract last settled down 58 cents at $73.97 on Friday because markets in the U.S. were closed Monday for the Memorial Day holiday.

Crude traded as high as $75.17 a barrel in Europe on Monday.

Oil has fallen from $87 early last month amid investor concern a debt crisis in Greece could spread to other European countries and hurt the global economy recovery.

Some analysts expect strong economic growth in Asia and the U.S. will more than offset a sluggish recovery in Europe and help bolster crude demand this year.

“A Greek economic slowdown has minimal effect on global oil demand growth, and thus, the crude price seems oversold,” ANZ bank said in a report. “Nevertheless, continued uncertainty over the Euro-zone will threaten investors’ confidence on risky assets and weigh on oil prices.”

In other Nymex trading in June contracts, heating oil rose 0.70 cent to $2.0115 a gallon and gasoline gained 0.66 cent at $2.0332 a gallon. Natural gas was up 1.4 cents at $4.355 per 1,000 cubic feet.

In London, the Brent crude July contact was down 47 cents to $74.18 on the ICE futures exchange.