Market Overview

Brent Falls on Spanish Corruption Scandal

Brent Falls on Spanish Corruption Scandal
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Brent crude oil edged down toward $115 on Tuesday morning as eurozone politics cooled the region's recent optimistic financial revival. The commodity slipped to $115.13 on Tuesday.

Eurozone politics moved into the spotlight on Monday after a selloff of Italian and Spanish bonds caused many to worry that the eurozone recovery had fallen off track.

Spanish Prime Minister Mariano Rajoy has been accused of being part of a profit taking scandal after the Spanish newspaper, El Pais, published reports that Rajoy and his party were involved.

The corruption accusation comes at a time when Rajoy is particularly vulnerable since much of the country already views the current government in a negative light due to the country's high unemployment and struggling economy.

Rajoy's opponents from the Socialist Party have called for his resignation, creating worry for investors who are looking for stability within the region. According to Reuters, some believe that Rajoy's resignation and a Spanish election could tip the balance within the region and undo much of the progress the region has made.

Investors also have their eyes on Italian elections, set for the end of February. To the surprise and distain of many investors, former Prime Minister Silvio Berlusconi made gains in the polls and proved that his candidacy wasn't to be ignored.

His promises to refund unpopular tax increases have made him more popular among Italians despite his previous experience as Prime Minister, which ended with resignation among unruly protests in 2011.

Brent prices also faced pressure as tension over Iran's nuclear development program eased after the nation said it would be open to direct talks with the US. The open door to negotiations is promising, but the nation has not made any commitments about the future of its nuclear program.

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