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Oil falls to near $92 after sharp 2-week selloff

Benchmark oil for June delivery was down 26 cents to $92.30 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $92.56 in New York on Thursday.

Brent crude for July delivery was down 60 cents at $106.89 per barrel in London.

Crude’s drop — it has plunged about 13 percent from $106 two weeks ago — began when the US reported weaker than expected job numbers May 4, followed by signs last week that China’s economy may be slowing more than previously forecast.

This week, political turmoil in Greece raised the likelihood that country could soon leave the euro common currency, a move that would likely hurt confidence in other debt-burdened European countries such as Spain and Italy, slow the global economy and reduce demand for fuel.

On Thursday, rating agency Moody’s downgraded its credit ratings on 16 Spanish banks while a newspaper reported depositors were rushing to withdraw their money from Bankia, a troubled Spanish bank that was effectively nationalized just one week ago.

Investors are also closely watching the US economy, which has shown signs of uneven growth in recent months. The government said Wednesday that crude inventories rose again last week to their highest since 1990.

“The oil market remains highly sensitive to any negative macroeconomic news, particularly with stockpiles at 22-year highs,” energy trader and consultant Ritterbusch and Associates said in a report.

A sustained drop in crude should eventually ease gasoline prices, which would slow global inflation and allow policymakers to implement stimulus measures or loosen monetary policy to boost economic growth.

In other energy trading, heating oil was down 1.7 cents at $2.84 per gallon and gasoline futures slid 1.2 cents at $2.81 per gallon. Natural gas rose 3.8 cents at $2.63 per 1,000 cubic feet.