By Nour Malas
Of ZAWYA DOW JONES
MANAMA (Zawya Dow Jones)--A senior Gulf oil minister expressed concern Saturday that European governments failed to ease global fears that Greece's sovereign debt crisis could spread increasing volatility in the oil market.
A bailout package for Greece "didn't give great confidence," Abdullah bin Hamad Al Attiyah said on the sidelines of an economic strategy summit in Bahrain, adding that oil markets "are volatile, and there's uncertainty."
Crude oil slid to a fresh three-month low near $71 a barrel Friday. At an intraday low of $70.83, it was down 19% from May 3, when it hit an 18-month high of $87.15 on hopes that the crisis in euro-zone sovereign debt had been resolved.
A sharp downturn in global stock markets hit the Gulf Saturday with Saudi shares hit badly at the start of the trading week in the kingdom. Shares traded on the Saudi Tadawal stock exchange were down 2.8% midday.
The European Union and International Monetary Fund approved last Sunday a near $1 trillion package to stand behind vulnerable euro-zone economies such as Greece and Portugal.
While the oil market responded positively the day after the plan was announced, Al Attiyah said Saturday that the package hasn't contained fears over a contagion effect from Greece's debt problem, or over sovereign debt issues in other countries.
"The whole world then started to ask the question about if it will move to other countries," he said. "We're always concerned because the world is under a lot of psychological pressure, oil is under pressure on how the Europeans will react," Al Attiyah added.
"We have to wait and see how the Europeans will move," he said. "We're watching, with nervousness."
Al Attiyah added there was no indication that the Organization of Petroleum Exporting Countries, or OPEC, would call an emergency meeting, despite a sliding oil price.
"It doesn't show that this is related to supply and demand," he said.
-By Nour Malas, Dow Jones Newswires; +97150-289-0223, email@example.com