Oil hits 8-month low as Spain optimism fades

Oil touched an eight-month low near $81 a barrel Tuesday in Asia amid concern Spain's bank bailout won't be enough to stem Europe's debt crisis.

REGULAR readers know that my view of the likely outcome of the crisis in Europe is a gloomy one. This hasn't changed. Given a number of positive developments in the euro zone—like fairly successful debt auctions for Spain and Italy, and corresponding drops in bond yields—it's worth keeping a close eye on the situation to make sure that something important and positive hasn't actually happened.

By Labutes IR:Spain was under the spotlight of financial markets during the past summer, and a bailout seemed only a matter of time. However, measures by the European Central Bank (ECB) to stem the debt turmoil eased the worst strains and Spain managed to avoid having to ask for financial help from its European partners.

Oil prices hovered below $95 a barrel Tuesday in Asia near a five-month low amid concern about Europe's debt crisis.

Oil prices fell to near $94 a barrel Tuesday in Asia, extending a two-week sell-off that has brought crude to a five-month low amid concern about Europe's debt crisis.

A few days ago Spain was purportedly going to need another €30 billion to €70 billion to recapitalize Spanish banks. I suggested the amount would be at least triple that and it did not take long to do so. Yahoo! Finance reports Spanish bailout could reach 100 billion euros A bailout for Spain's teetering banks, once requested by Madrid, could amount to as much as 100 billion euros, two senior EU sources told Reuters on Saturday.

Just over two years ago I warned that Spain posed a significant threat to the EU area economies. This was a very popular stance, and since I'm more of a medium to long term strategist and Spain didn't experience any immediate pain, my stance was considered even more morose. Well, luckily, I supplied ample research to paying subscribers who were well prepared for what is now evidently coming down the pike.