Brent oil trading near $80 on new magic $650B EU fund

10 May 2010 10 May 2010

BonTrade

Brent oil prices are trading higher on Monday, back near the $80 mark as a new, magical EU debt fund is announced by European policy makers will contain sovereign debt risks and maintain economic growth in Europe.

Brent crude oil futures for June settlement rose as much as 2.6 percent, to $80.20 a barrel on the London based ICE Futures Exchange at 1:43 p.m. Singapore time.

“People have been selling risky assets for the past several weeks because of the Greek debts,” said Tetsu Emori, a commodity fund manager with Astmax Ltd. in Tokyo. “The people that were selling off are now buying back.”

“There will be traders with a longer-term view looking at this as a better entry point for speculative positions,” said Toby Hassall, commodity analyst at CWA Global Markets Pty in Sydney. Markets remain volatile and risk appetite among most investors remains quite low.”

Oil prices are at a reasonable level and the global recovery is proceeding at a “satisfactory” pace, OPEC Secretary General Abdalla Salem El-Badri said in Doha yesterday.