Brent oil futures back near $83 as stock markets sell off

Brent oil futures have lost over $2 in a many hours in market trading today as stock markets in Europe and the US sell off with investors considering the repercussions of the latest Irish bank bailout.

Latest Brent Oil Price

In London, Brent crude oil futures for January 2011 delivery was trading at $83.37 a barrel, 16.20 GMT on the ICE Futures Exchange.

European Debt Crisis Continues

Global markets dismissed the EU’s bailout of Irish debt, fearing bond vigilantes will quickly turn against other debt ridden Eurozone members including Portugal, Spain and Italy.

“On the markets, the thinking is that once the case of Ireland is resolved, Portugal will find itself on the front line.” said Joao Cravinho, a director at the European Bank for Reconstruction and Development.

ICE Dollar Index Surges Higher

Both Brent and Light crude oil prices have taken a hit today, mainly on weaker stock markets, but also on today’s strength of the US dollar, as seen by gains made on the ICE Dollar Index.

The ICE Dollar Index, which tracks the US dollar against a trade weighted basket of six major world currencies was at 78.854, over one percent higher than 78.143 recorded earlier today.

A stronger US dollar makes oil futures and other commodities more expensive to buy for investors using other currencies.