Oil slips on turbulence in Europe, China

Benchmark oil was down 49 cents to US$91.40 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped 59 cents to end at US$91.89 per barrel in New York on Tuesday.

Brent crude, which is used to price international varieties of oil, fell 77 cents to US$110.80 per barrel on the ICE Futures exchange in London.

Investors remain concerned about Europe's ongoing financial crisis after Spain's prime minister said a request for bailout funding isn't imminent.

Slower growth in China, which is a huge importer of oil, has also kept a lid on oil prices. Slower growth can cut demand for oil and other energy products.

Worries have also intensified that the U.S. economy will fall off a “fiscal cliff” at the end of the year. That's when tax increases and deep spending cuts will take effect unless Congress reaches a budget deal. A recession could follow.

“There is downside risk in the overall market,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “Oil is one of those commodities where I think demand is well-covered by current supply capacity.”

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