Brent oil price steady amid UK, EU economic concerns

11 March 2010 11 March 2010

BonTrade

Brent oil prices are trading a steady path around the $80 mark on Thursday amid growing concerns regarding the UK and EU economic recovery plans for 2010.

“We have actually become more worried about the outlook for the global economy,” London-based Capital Economics said in a report. “The boost from policy stimulus will soon fade. The recovery looks fragile in the UK and may already have stalled in the euro zone.”

On Thursday in London, Brent crude oil futures was trading down 52 cents at $79.96 on the ICE Futures Exchange.

UK’s Gordon Brown’s attempt to persuade voters yesterday that the government is steering a successful path to recovery was immediately thrown into doubt by official figures showing a sharp fall in industrial output in January. Data from the Office for National Statistics (ONS) unveiled a 0.4 per cent drop in overall industrial activity during the month, surprising City economists who had predicted a 0.3 per cent rise.

Benjamin Williamson, economist at the Centre for Economics and Business Research said: “The latest data make for unnerving reading as we cannot tell how much of the declines in production and exports can be blamed on the bad weather at the start of the year and how much can be blamed on a further spin of the inventory cycle.”

The elusive nature of the eurozone’s economic recovery was highlighted on Wednesday as generally positive industrial production figures across the continent stood in contrast to an unexpected slump in German exports. Despite the weakening euro, exports in Europe’s largest economy fell 6.3 per cent in January on the previous month, the biggest drop in a year, according to the federal statistics office’s seasonally-adjusted figures.