Oil prices slide on Spain woes

World oil prices slid as traders booked profit from recent rallies amid worries about the struggling eurozone, where Spain's borrowing costs soared dangerously high.

New York's main contract, light sweet crude for August, finished the session on Friday at $91.44 a barrel, down $1.22 from Thursday's closing level.

In London trade, Brent North Sea crude for delivery in September shed 97 cents, settling at $106.83 a barrel.

"The recent risk premium being priced into crude is being unwound as the pendulum of price swings back towards the bears as the European debt crisis comes back into focus," said Matt Smith at Summit Energy.

Struggling Spain's woes slammed stocks on both sides of the Atlantic and weakened the euro against the US dollar, making dollar-priced oil more expensive, tending to dent demand.

The bloc's fourth-largest economy was forced to pay a yield above 7.0 per cent in a 10-year bond sale, a level considered unsustainable and that pushed Greece, Ireland and Portugal into international bailouts.

Crude futures prices have soared in recent days, hitting two-month highs on Thursday, as traders worried that rising tensions in the crude-rich Middle East will hamper supplies.

On Friday "bearish stars" aligned, Smith said.

"Hence, the euro shows weakness, risk appetite wanes, and oil sells off."

Rich Ilczyszyn at iiTrader said the market was taking a breather, but that tensions over oil-producer Iran's suspected nuclear program continued to evolve.

"What you're seeing is profit taking before the weekend," he said.

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