Crude oil futures declined on Wednesday and touched their lowest since October 2011. Investors were bearish on the crude oil in reaction to the Spain’s economic turmoil, lower Chinese demand outlook and stronger greenback.

Crude oil futures contract for July delivery declined 3.2 percent or $2.94 to settle at $87.82 per barrel on the New York Mercantile Exchange. The respective contract touched its intraday low of $87.49. Analysts were of the opinion that the decline in crude oil prices is in continuation over the European economic concerns. Uncertainty among traders rose after the news of Spain’s downgraded rating to B from BB- by Egan-Jones Ratings Co. The rating agency also gave a negative outlook for Spain’s economy which resulted in higher yield on Spanish bonds and categorized the Spanish debt into junk status.

The greenback also turned stronger further exerting pressure on commodities as higher dollar makes commodities more expensive for foreign investors. The dollar index DXY which tracks the greenback movement versus its major counterparts gained to 82.995 on Thursday as compared to 82.468 on Tuesday’s North American trading session.

In China, the news was that Chinese government is not going for aggressive stimulus measures to boost its economic growth. It was also said that if any stimulus operation is launched it would be on much smaller scale as compared to the one in 2008.

Among other energy commodities, gasoline futures contract for June delivery fell 1.7 percent or $0.05 to $2.86 per gallon while heating oil futures contract for the same month delivery declined 2.5 percent or $0.07 to $2.74 per gallon.

Natural gas futures contract for July delivery slipped 2.7 percent or $0.07 to settle at $2.42 per million British thermal units.