NewsCrude slides below $70 per barrel due to renewed sovereign debt woesPreviousForecastAnalysisCrude futures dropped today below $70 due to the sharp decline witnessed in global stock markets, especially after the wave of panic over the extending debt crisis spread throughout Europe.

Confidence levels in markets slid after renewed fears regarding the European debt crisis, where Hungary is at risk of default and under heavy pressure to reduce its budget deficit to avoid falling further into danger and being unable to repay its debt. Fears are clearly evident on stock markets and specifically the euro.

The Hungarian president said that Hungary is not Greece and that the government will take extreme measures to reduce the budget deficit; although recent announcements were not able to calm markets, since the euro is trading below 1.2000 against the dollar and is considered to be its lowest in over four years!

Crude dropped by $1.50 to trade around $70.00 per barrel as of 07:30 GMT after recording its lowest around $69.50, while keeping in mind that crude opened with a bearish gap today.

Moreover, crude last Friday slid by $3.10 to close around $71.51 per barrel after the US jobs report showed data below market expectations, where the number of employees hired in May was 431 thousand compared to previous 290 thousand, while expectations were much stronger at 536 thousand added jobs.

Dear reader, the negative effect the US data and Hungary reduced investors' confidence, pushing them towards low yielding assets and safe haven demand.

Crude opened last Friday around $74.50 per barrel recording its highest around $75.40 and lowest around $70.77 closing around $70.95 per barrel.

The S&P GSCI index closed Friday around 474.80 after dropping 15.21 points; whereas the RJ/CRB index also followed and slipped 5.95 points to close around 248.94.

As for NYMEX as of 02:43 EST; motor gasoline fell to $197.900 per gallon by $1.630; heating oil is trading around $194.340 per gallon after falling by $1.430; whereas natural gasoline gained by $0.007 to record $4.804 per 1000 cubic feet. In London, Brent slumped 0.690 points to record 71.400.

Crude opened today around $70.40 recording its highest around $70.50 and lowest around $69.50 per barrel, currently trading around $70.50 per barrel.