Brent oil price back at $75, Euro debt spooks the market

29 June 2010 29 June 2010

BonTrade

ICE Brent oil prices have fallen well over three percent in trading on Tuesday afternoon as Euro debt worries spook markets worldwide send Brent back to the $75 mark.

In London, Brent crude oil futures for August 2010 delivery fell around $3 to $75.06 on the ICE Futures Exchange by 16.00 hours GMT.

The flight from risk came “amid heightened anxiety over the possible stalling of the global economic recovery and the fragility of the banking system,” said currency strategists at Brown Brothers Harriman in New York.

The Euro has borne the brunt of the adjustment, falling to levels not seen since late 2008 against the pound and probing new record lows against the Swiss franc as well as hitting its lowest level in more than eight years against the yen, BBH said.

In addition to sour sentiment on economic growth, concerns about the European Central Bank’s plans to refinance a EUR442 billion funding program on Thursday also pressured the common currency.

Meanwhile, the ICE US Dollar Index, which tracks the US dollar against a trade weighted basket of currencies, was at a session high of 86.267 from late Monday’s 85.701 which also had a downward effect on oil prices.