Brent oil price heads towards $71, European markets flat

5 July 2010 5 July 2010

BonTrade

ICE Brent oil futures are trading lower and prices seem to be heading back down to the $70 – $71 a barrel mark as European stock markets continue Monday’s session flat with many exchanges slightly lower.

In London, Brent crude oil futures for August 2010 delivery was at $71.35 a barrel at 15.45 GMT on the ICE Futures Exchange.

Brent’s price correction today could also have a relation to the US dollar which is trading higher than most currencies this afternoon.

European Markets – Investor Views

“European stocks are a dirty word among investors,” Ian Richards, London-based strategist at RBS, said at a presentation in London today. “Equity markets are all about pricing in risk and there is a major risk premium already on the table.”

“The European market has already seen a sharp correction and we believe a substantial amount of slowing growth momentum is now priced,” Goldman Sachs strategists wrote in a report dated July 2nd 2010.

Although RBS and Goldman Sachs seem to feel that stock markets in Europe have bottomed, it will once again come down to the heavy weight punches of the Dow Jones and the US dollar.

Brent oil prices have been tracking stock markets for most of 2010 and from what we can tell, this is not about to change in the short term at least.