Oil down toward $104 on Spain downgrade, US data

Oil prices fell to near $104 a barrel Friday in Asia after Standard & Poor's lowered Spain's credit rating by two notches, re-igniting fears about Europe's debt crisis.

Standard and Poor's on Friday lowered the credit rating of 34 Italian banks in a move that follows the agency's two-notch downgrade of Italy on January 13.Italy's biggest financial institutions, including UniCredit, Intesa Sanpaolo, Banca Nazionale del Lavoro and Mediobanca, were hit.In January, Standard and Poor's downgraded Italy's credit rating by two notches to BBB+ from A.

Standard and Poor's ratings agency downgraded France's AAA rating by one notch to AA+, French Finance Minister François Baroin confirmed on Friday. Austria also lost its top credit rating while Italy was downgraded two notches to BBB+.

Standard & Poor's on Monday downgraded the ratings of nine Spanish banks, including Santander and BBVA, after slashing the country's credit standing because of worsening deficit and growth problems.The banks affected include Santander and its subsidiary Banesto, BBVA, Banco Sabadell, Ibercaja, Kutxabank, Banca Civica, Bankinter and the local unit of Barclays. S&P on Friday cut Spain's sovereign debt rating by two notches to BBB-plus.

Oil prices rose to near $104 a barrel Tuesday in Asia after a successful Spanish debt sale eased fears that Europe's debt crisis could flare again.

A top credit agency hit BP with a steep cut in its creditworthiness on Friday because of the "worsening impact" of the cost of oil spill damage in the Gulf of Mexico on the oil giant's finances.The costs could weigh on BP's finances for years, international ratings agency Moody's said, as it cut down BP's credit rating by three notches, following similar moves this week by Fitch and Standard & Poor's.

Frank Holmes submits:After selling off nearly 14 percent the previous week, oil prices finished last week slightly higher at $99.65 per barrel. While the end result was a net positive, the volatility continued. Oil prices per barrel reached $104, then fell to around $96, before nesting just below $100.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.The article below is a guest contribution by Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors.