Oil Prices Hit 8-Month Low as Spain Optimism Fades

By PABLO GORONDI


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% from $106 since early last month amid signs of slowing economic growth in the U.S., China and Europe.

Traders will also closely watch a quarterly meeting of the Organization of Petroleum Exporting Countries in Vienna on Thursday. Some members of the cartel have suggested recently that OPEC is producing too much crude, and the group could decide to cut supplies to help boost prices.

An OPEC report showing oil output at its highest in the last four years is sure to be used by price hawks such as Iran and Venezuela. The monthly report, published Tuesday, showed OPEC production just short of 33 million barrels a day. That's almost 3 million barrels more than the organization's overall quota and more than 630,000 barrels above the May figure.

The report said it expected world demand this year to increase by 0.9 million barrels a day while saying at the same time that economic uncertainty might upend that prediction and lead to "a further decline in world oil demand."

Saudi Oil Minister Ali al-Naimi, however, said OPEC needed to raise its production target of 30 million barrels a day.

• <p> 2010 New Retail Price: <strong>$34,137</strong><br /> 2011 Used Retail Price: <strong>$20,120</strong><br /> Depreciation: <strong>41.1%</strong><br /> J.D. Power Predicted Reliability Score: <strong>3.5/5</strong><br /> <br /> When Chrysler introduced its brand new 300 line in 2005, it met with much success. The 300C was awarded <em>Motor Trend</em> Car of the Year. The vehicle sold extremely well -- nearly 145,000 units in the first year, and 120,000 in the second. Since then, however, sales of the full-size sedan have dropped heavily as other vehicles, including the new Buick Lucerne, the Ford Taurus, and the Ford Fusion, have gained ground in the market. The 2010 version of the 300 posted a record-low 37,116 units sold. According to Edmunds, many of its features, including its four-speed automatic transmission, have become outdated. In response to flagging sales, Chrysler introduced a completely overhauled 2011 edition of the vehicle.</p>
• <p> 2010 New Retail Price: <strong>$36,087</strong><br /> 2011 Used Retail Price: <strong>$24,979</strong><br /> Depreciation: <strong>30.8%</strong><br /> J.D. Power Predicted Reliability Score: <strong>4/5</strong><br /> <br /> From the late 1990s through 2000, a series of horrible vehicle rollovers due to tire tread separation led to the recall of thousands of Firestone tires on Ford Explorers. While Ford and Firestone blamed each other for the debacle, the brand value of the full-size SUV has never been the same. Ford continued the line in several generations, with new versions being introduced in 2002, 2006 and 2011. With the release of the &quot;fifth generation&quot; Explorer this year, last year's model&nbsp; lost a significant portion of its value -- more than $11,000 in a single year.</p>
• <p> 2010 New Retail Price: <strong>$32,073</strong><br /> 2011 Used Retail Price: <strong>$22,147</strong><br /> Depreciation: <strong>30.9%</strong><br /> J.D. Power Predicted Reliability Score: <strong>4.5/5</strong><br /> <br /> Ford's flagship muscle car had a major successful redesign in 2005. In that first year, the fifth-generation Mustang sold 160,000 units and more than 166,000 units the next. Those numbers began to dwindle toward the end of the decade, and the 2010 version sold less than 75,000 units. In an attempt to boost sales, Ford included so many upgrades to the engine, transmission, and other components, that it could almost be considered a new generation of Mustang. The 2011 version has won a series of awards, including making <em>Car and Driver's</em> Ten Best list. This has, of course, left the 2010 version in the dust, and while that year's Mustang received excellent reviews from both <em>Consumer Reports</em> and J.D. Power, it lost more than 30% of its value in the past year.</p>
• <p> 2010 New Retail Price: <strong>$63,605</strong><br /> 2011 Used Retail Price:<strong>$43,799</strong><br /> Depreciation: <strong>31.1%</strong><br /> J.D. Power Predicted Reliability Score: <strong>3.5/5</strong><br /> <br /> The QX is Infiniti's full-size luxury SUV. The first generation ran from 1997 to 2003. A much larger version, built on the platform of a Nissan Titan pickup truck, arrived in 2004. It's one of the most expensive full-size SUVs on the market, but that model received poor reviews from J.D. Power, which gave it a 2.5 out of 5 for initial quality and&nbsp; overall performance. Horrible sales led in part to a complete redesign, and to better sales. The 2011 version sold 27.1% better this June than last, when it moved a measly 658 units, according to<em>Motor Trend.</em> But the resale value of the 2010 QX65 has dropped by nearly $20,000 in a single year -- the equivalent in value to a brand new 2012 Nissan Altima.</p>
• <p> 2010 New Retail Price: <strong>$51,360</strong><br /> 2011 Used Retail Price: <strong>$35,220</strong><br /> Depreciation: <strong>31.4%</strong><br /> J.D. Power Predicted Reliability Score: <strong>4/5</strong><br /> <br /> The Cadillac STS suffered the same fate as the DTS in 2011: The line was discontinued after consistently poor sales. In 2010, the STS sold just 4,473 units, down 29,000 units, or 86% from 2005. The 2010 version of the full-size luxury car lost more than 31% of its value in a single year. Cadillac next attempt to crack the full-size luxury market will come when it introduces the XLS in 2012.</p> <p> </p>
• <p> 2010 New Retail Price: <strong>$31,057</strong><br /> 2011 Used Retail Price: <strong>$21,095</strong><br /> Depreciation: <strong>32.1%</strong><br /> J.D. Power Predicted Reliability Score: <strong>3.5/5</strong><br /> <br /> The E-series wagon, Ford's popular line of full-size vans for passengers and freight, reached its 50th anniversary in 2011, which prompted a special edition of the van, including a variety of new accessories such as a built-in navigation system and HD radio. The 2010 version of the vehicle, while part of the same generation, has nevertheless lost nearly a third of its resale value. The 2010 version of the van also received poor reliability scores from J.D. Power.</p>
• <p> 2010 New Retail Price:<strong> $22,183</strong><br /> 2011 Used Retail Price: <strong>$15,056</strong><br /> Depreciation: <strong>33.2%</strong><br /> J.D. Power Predicted Reliability Score: <strong>4/5</strong><br /> <br /> The car received a 2.5 out of 5 from J.D. Power for overall performance and design as well as for for comfort, and a 3 out of 5 for performance. In addition, a hybrid version of the Sonata was released in 2011, which may be one of the main reasons for the 2010 non-hybrid's precipitous drop in value.</p>
• <p> 2010 New Retail Price: <strong>$23,183</strong><br /> 2011 Used Retail Price: <strong>$14,641</strong><br /> Depreciation: <strong>36.8%</strong><br /> J.D. Power Predicted Reliability Score: <strong>2.5/5</strong><br /> <br /> The 2010 Kia Optima is part of the second generation of the Hyundai-owned automaker's line of mid-size sedans. With only average or below-average performance and reliability scores from Edmunds and J.D. Power, the car had difficulty competing with incredibly popular mid-size&nbsp; vehicles as the Camry, Accord, and Civic. The 2010 version turned out to be the last of its generation, and the introduction of the completely revamped Optima in 2011 -- and a hybrid version -- caused the value of the one-year old vehicles to plummet.</p>
• <p> 2010 New Retail Price: <strong>$29,652</strong><br /> 2011 Used Retail Price: <strong>$18,544</strong><br /> Depreciation: <strong>37.5%</strong><br /> J.D. Power Predicted Reliability Score: <strong>3/5</strong><br /> <br /> Dodge's legendary muscle car has seen many changes over the past half-century. The most recent generation, which ran from 2005 to 2010, sold moderately well but received horrible marks from <em>Consumer Reports</em> and other reviewers. The magazine gave the latest version of the vehicle a 2.5 out of 5 for initial quality, and 3 out of 5's for overall performance, design, and reliability. In 2011, Dodge introduced a new generation of the vehicle. According to Edmunds, the redesign features &quot;a long list of improvements,&quot; including modified taillights, a new dashboard, and a sleeker body design.</p>
• <p> 2010 New Retail Price: <strong>$34,137</strong><br /> 2011 Used Retail Price: <strong>$20,120</strong><br /> Depreciation: <strong>41.1%</strong><br /> J.D. Power Predicted Reliability Score: <strong>3.5/5</strong><br /> <br /> When Chrysler introduced its brand new 300 line in 2005, it met with much success. The 300C was awarded <em>Motor Trend</em> Car of the Year. The vehicle sold extremely well -- nearly 145,000 units in the first year, and 120,000 in the second. Since then, however, sales of the full-size sedan have dropped heavily as other vehicles, including the new Buick Lucerne, the Ford Taurus, and the Ford Fusion, have gained ground in the market. The 2010 version of the 300 posted a record-low 37,116 units sold. According to Edmunds, many of its features, including its four-speed automatic transmission, have become outdated. In response to flagging sales, Chrysler introduced a completely overhauled 2011 edition of the vehicle.</p>
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Al-Naimi's remarks indicate "that the world's leading oil supplier has no intention of cutting back on production despite recently lower prices and an apparent oversupply in the market," said a report from JBC Energy in Vienna.

"If production remains at its current level, the global oil market risks seeing a supply surplus of well in excess of 1 million barrels per day in the second half of the year, which would exert further pressure on the oil prices," said analysts at Commerzbank in Frankfurt.

In other energy trading, heating oil was unchanged at $2.6357 per gallon while gasoline futures fell 1.13 cents to $2.6453 per gallon. Natural gas lost 1.4 cents to $2.204 per 1,000 cubic feet.

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Alex Kennedy in Singapore and George Jahn in Vienna contributed to this report.