Brent oil price trading at $74 as new Euro concerns hit

19 May 2010 19 May 2010

BonTrade

Brent crude oil prices are trading back down in the $74 range on Wednesday as more bad news in Europe may well hit markets and commodities hard today.

Brent crude oil futures were trading down at $74.45 midday Singapore time, Wednesday on the ICE Futures Exchange.

“The ongoing concerns over the European debt are still very much lingering in the minds of every investor,” said Serene Lim, a Singapore based oil and gas analyst with the ANZ bank.

Investors are worried that austerity measures announced by Greece and other debt laden eurozone countries would hurt growth and consumption in Europe, thus weighing on energy demand. To add to this, Germany has also announced on Tuesday a ban on naked short sales of euro denominated government bonds, credit default swaps based on those bonds, and shares in Germany’s 10 leading financial institutions.

Germany’s decision to ban naked short sales of euro denominated government bonds is prompting some Japanese brokers to avoid selling European debt during Asian trading hours, market players said on Wednesday.