Brent oil trading firm over $83, Euro debt concerns persist

24 November 2010 24 November 2010

BonTrade

Brent oil prices are trading firm over the $83 mark early on Wednesday amid continued speculation that Portugal and even Spain may soon need financial help to contain their rising debt mountains.

Latest Brent Oil Price

In London, Brent crude oil futures for January 2011 delivery was trading at $83.64 a barrel, 06.45 GMT this morning on the ICE Futures Exchange, after closing yesterday’s trading session at $83.10.

The latest Euro debt fears, along with comments from German Chancellor Angela Merkel that the euro is in an “extraordinarily serious situation,” sent the US dollar sharply higher against the euro, which typically weighs on oil prices.

Stock Markets Hit by Debt Concerns

Portugal’s effort to contain its debts came under increasing pressure yesterday as bond market jitters shook Portugal and Spain, seen as the eurozone’s next weakest links.

Portugal’s borrowing costs are again rising, suggesting that investors are more worried about possible default, while Spain limited the size of a bond sale because traders demanded sharply higher premiums.

Stock traders panicked and dumped shares across all sectors yesterday, sending Portugal’s stock market down 2.2 percent by the close, while Spain’s sank 3.1 percent to a level not seen since July 2010.

Meanwhile, the US dollar gained strength off the back of the latest European debt concerns which is also weighing on oil prices and other commodities, however gold prices remain in positive territory.