The price of oil hovered above $82 a barrel Tuesday after touching an eight-month low near $81 earlier in the session amid concern Spain's bank bailout won't be enough to stem Europe's debt crisis and suggestions OPEC could boost production targets.
By early afternoon in Europe, benchmark oil for July delivery was down 24 cents to $82.46 per barrel in electronic trading on the New York Mercantile Exchange. Earlier on Tuesday, oil dropped to $81.07, the lowest since October, having dropped $1.40 on Monday.
In London, Brent crude for July delivery was down 72 cents at $97.37 per barrel on the ICE Futures exchange.
Crude jumped temporarily on Monday after the 17 countries that use the euro common currency pledged to lend Spain $125 billion to rescue its faltering banks. However, attention soon turned to the Greek election this weekend, the outcome of which could determine if Greece stays in the euro.
"There are highly uncertain and fragile economic conditions across the eurozone that dominate the markets and cause nervous trading and volatility," said analysts at Sucden Financial in London.
Oil has plunged about 24 per cent from $106 since early last month amid signs of slowing economic growth in the US, China and Europe.