Oil Reaches Low of 11 Years, Elections in Spain Hits Assets

Brent crude extended its slide Monday to the lowest level in over 11 years while investors sold Spanish stocks and bonds after the general election was inconclusive that could set up a possible stalemate for weeks in the political arena.

The Ibex share index in Spain fell to a low of three months but stocks overall in Europe moved up, following suit from the gains across Asia and higher stock futures for the U.S.

Spanish stocks as well as bonds recovered some earlier losses, but remained down during Monday’s midday. Oil recovered some, having dropped earlier by over 2% to a per barrel price of $36.05.

That was the lowest price since July of 2004 and had lost more than 20% of its overall value the past month and one third since the beginning of October.

The persistent weakness of crude has exerted a heavy pressure downward on the currencies in countries that are oil exporters, foreign reserves and budgets of the governments.

The latest feeling the heat is Azerbaijan, which as of Monday floated the manat, its currency. The currency dropped 32% to 1.55 per U.S. dollar.

Earlier across Asia, shares outside Japan were up 0.3% as investors pushed up the blue chips in China modestly. China’s index was up 2.6% but the Nikkei 225 in Japan dropped by 0.4%.

The Ibex in Spain was down by 2%. Earlier it hit the lowest since September 29 following the fragmented end to the election on Sunday that has cast an uncertainty over the reform program in the country and the broader economy.

The conservative Popular Party of Mariano Rajoy the Prime Minister won more seats than any of the other parties but fell far short of reaching a majority.

Left wing parties could not win a clear mandate for governing either, and talks to set up a coalition government might drag on for many weeks.

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