Oil Prices Hit by Economic Gloom

World oil prices fell Monday, making a downbeat start to the week as investors fretted over economic gloom in both the eurozone and the United States, analysts said.

New York's main contract, West Texas Intermediate (WTI) crude for delivery in June, dropped 59 cents to $104.34 a barrel.

Brent North Sea crude for June shed 78 cents to $119.05 in London midday trade.

Official data Monday showed Spain had tipped back into recession -- another dose of grim news for a cash-strapped economy that has been hobbled by rising sovereign debt, soaring unemployment and deeply troubled banks.

"Crude oil prices started the week in negative territory, following fairly disappointing economic data from Spain that confirmed that the Spanish economy is sliding into recession," said Sucden broker analyst Myrto Sokou.

"The data weighed on crude oil prices, confirming a slowdown in oil demand, especially from the European countries due to the lack of economic development."

Spanish gross domestic product shrank by 0.3 percent in the first quarter of 2012, equalling the slump in the final quarter of 2011, according to preliminary data from the National Statistics Institute.

The return to recession, blamed on weak domestic demand only partially compensated by exports, comes barely two years after Spain emerged from the last downturn at the start of 2010.

Investors fear that Spain could follow a Greek-style downward debt spiral and trigger chaos in the market, in turn ravaging global energy demand.

Oil prices fell Monday also after data showed that US economic growth slowed sharply in the first quarter of 2012, rekindling concerns that the nascent recovery in the world's top oil consumer was losing steam.

US gross domestic product grew at an annual rate of 2.2 percent in the first three months of 2012, slowing from 3.0 percent in the fourth quarter of 2011.

The dip in growth was largely attributed to a slump in government spending.