London - Global oil prices dived to one-month lows on Tuesday, as inconclusive Italian national elections sparked concern about economic growth and energy demand in the eurozone region, dealers said.
Brent North Sea crude for delivery in April sank to $113.26 a barrel - which was the lowest point since January 29.
It stood at $113.37, down $1.07 from Monday's closing level, in later London deals.
New York's main contract, West Texas Intermediate (WTI) or light sweet crude for April, slid to $91.92 a barrel - a trough last witnessed on January 4.
The contract later pulled back to $92.30, down 81 cents from Monday.
European equities and the euro also slumped on Tuesday as markets assessed the fallout of Italy's political impasse after elections in the indebted eurozone country.
A stronger greenback also makes dollar-priced crude more expensive for buyers using cheaper currencies, denting demand.
“There's a sea of red across trading screens... as the lack of a clear winner in the Italian elections is causing panic amongst investors,” said boss Angus Campbell at trading group Capital Spreads.
“The result is a mass sell off of equities, in particular Italian and other banking stocks, the euro and pretty much any other risk asset you can think of.”
A political deadlock loomed in Italy as it appeared Sunday's elections failed to produce a clear winner.
Polls show that while the leftists won the lower house, the party run by former prime minister Silvio Berlusconi had more seats in the upper house.
A majority in both chambers of parliament is required to form a government, leaving Italy in a state of limbo.
“Investors will focus their gaze on Italy's election results, which could see the eurozone's third largest economy face political deadlock in the coming months, casting doubt on further progress of economic reforms and rekindling eurozone fears,” said analysts at Vienna-based oil consultancy JBC Energy.
“Meanwhile, the West and Iran will get another chance to lift the current stalemate, as talks begin in Almaty on Tehran's nuclear programme.
“While the talks are unlikely to yield concrete results, any positive news from the meeting may exert downwards pressure on oil prices,” they added in a note to clients.
In Almaty, world powers and key crude producer Iran have exchanged offers in crunch talks aimed at breaking a decade of deadlock over Tehran's nuclear drive.
The two-day meeting comes as sanctions bite against the Islamic republic and Israel still refuses to rule out air strikes to knock out Iran's suspected nuclear weapons push.
The first round of closed-door talks started at around 10:30 SA time after an initial bilateral meeting between the Chinese and Iranian delegations.
“We have come here with a revised offer and we have come to engage with Iran in a meaningful way,” EU foreign policy chief Catherine Ashton, who negotiates with Iran on behalf of the world powers, said in a statement.
She said the ambition was that “we see progress by the end of the meeting.”
The world powers are offering Iran permission to resume its gold and precious metals trade as well as some international banking activity which are currently under sanctions, Western officials told AFP.
But in exchange, Iran will have to limit sensitive uranium enrichment operations that the world powers fear could be used to make a nuclear bomb, the sources added. - Sapa-AFP