By Pablo Gorondi
ITALY -- The price of oil fell below $93 a barrel on Tuesday, dragged down by the prospect that political uncertainty in Italy could rekindle Europe's debt crisis, weighing on the global economy.
By early afternoon in Europe, benchmark crude for April delivery was down 65 cents at $92.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 2 cents to settle at $93.11 on Monday.
Markets were rattled by the possibility of political paralysis in Italy after near-complete results in crucial national elections showed no clear front-runner. The uncertainty bodes ill for the nation's efforts to pass the tough reforms it needs to overhaul its debt-laden economy. That could fire up Europe's long-simmering crisis of confidence in the euro common currency."It seems that Italy is repeating the same story as Greece, bringing renewed uncertainty about European political and economic conditions and further volatility and nervous trading across the markets," said a report from Sucden Financial Research in London. Adding to the downbeat mood were weak manufacturing figures from China on Monday and looming spending cuts in the U.S. as political leaders in Washington remain at odds over how quickly to trim the budget deficit. Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products. Data for the week ending Feb. 22 are expected to show a build of 2.6 million barrels in crude oil stocks and a draw of 1.5 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill. The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration -- the market benchmark -- will be out on Wednesday. In London, Brent crude was down $1.03 at $113.41 on the ICE futures exchange. In other energy futures trading on Nymex: -- Wholesale gasoline was down 4.71 cents at $3.2165 a gallon. -- Heating oil dropped 4.03 cents to $3.0578 a gallon. --Natural gas rose 1.3 cents to $3.427 per 1,000 cubic feet.