Oil Enters Bear Market on Europe Debt Crisis, Slow U.S. Economy

Oil entered a bear market in New York as it headed for the biggest monthly drop in more than three years on speculation Europe’s worsening debt crisis and a slowing U.S. economy will reduce fuel demand.

Futures today are 20 percent lower than their highest settlement this year, a definition of a bear market. Prices slipped as the cost of protecting Spanish bonds against default climbed to a record yesterday and a Greek poll showed support for anti-austerity parties ahead of elections. A report yesterday showed pending U.S. home sales in April slid the most in a year. Oil peaked in February on concern that tension with Iran will disrupt global supplies.