Brent oil price steady at $80 as stock markets shoot higher

11 May 2010 11 May 2010

BonTrade

Brent oil prices opened trading on Tuesday firm around the $80 mark as global stock markets shoot higher after a new European debt fund gave investors renewed confidence in buying back into stocks.

Brent crude oil futures for June was at $80.12, midday Singapore time on the ICE Futures Exchange.

Some analysts expect the European debt fund to temporarily stabilise European bond prices but eventually weaken the euro and weigh on oil prices.

“While the euro zone support plan appears sufficient to forgo any contagion for now, additional weakening in the euro should eventually spill over” into oil prices” Ritterbusch and Associates said in a report.

“What the ECB did when they announced they would buy back corporate and government bonds was the equivalent of giving the market a shot of heroin. It’s going to make us feel good and euphoric for a while, but once the drugs start to wear off we have to be aware there could be the same problems,” said Phil Flynn, a senior market analyst with PFG Best.