Spain's borrowing costs have risen to the highest rate since the launch of the euro in 1999."The eurozone crisis needs much more than short-term measures - but all the investors are seeing is political infighting rather than a collective long-term plan," Justin Harper of IG Markets told the BBC.
The benchmark 10-year bond yield hit 6.81%, as optimism about the weekend's Spanish bank bailout continued to evaporate.
"The European policy makers are slow to react to the issues. They are doing too little, too late."Broader falls
Analysts said the latest fears arising from the eurozone had added to worries about a global slowdown, hurting demand for oil.
They said that a fragile recovery in the US coupled with slowing growth in emerging markets such as China and India had hit investor sentiment.
"It is a continued set of bad news from all across the globe, and we have been belted with it for months on end without any let up," said David Lennox, a resources analysts with Fat Prophets in Sydney.
In London, the price of Brent crude fell 1% to $96.90 a barrel.
Mr Lennox added that if global economic uncertainty continues and oil production levels remain the same, prices may fall even further.
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