Brent oil price trading higher, finds support near $72

2 July 2010 2 July 2010

BonTrade

Brent crude oil prices are trading higher on Friday as this week’s grim economic news puts pressure on oil prices, sliding Brent oil back down to the $72 a barrel range.

In London, Brent crude oil prices for August 2010 delivery was at $72.06 a barrel at 08.00 GMT on the ICE Futures Exchange.

“We do expect the recovery to support crude oil prices ahead, once much of the doom and gloom mindset fades away, but a pervasive air of somewhat irrational nervousness still persists.” Barclays Capital said in a report.

“The enormity of problems in Europe, possible slowdown in China and the US is enough to tip it.” said William Adams, an analyst at London’s BaseMetals.com.

Meanwhile, oil prices received a slight boost as the US dollar lost some ground. The US Dollar Index, a gauge of its performance against six other major currencies, hovered just above a two month low after it shed 1.6 percent in trading yesterday, while the US dollar staggered up against the Yen after hitting a 7 month low of 86.96 Yen in the fray.

“This is broad-based US dollar sales. It’s not risk aversion, rather dollar aversion,” said Masafumi Yamamoto, chief FX strategist Japan at Barclays in Tokyo.