Brent oil price ends week near $86 amid Euro concerns

27 November 2010 27 November 2010

BonTrade

Brent crude oil prices end a choppy week’s trading near $86 a barrel amid continuing Euro debt problems in Ireland, Portugal and Spain which could trigger lower oil prices and a stronger US dollar.

Brent Oil Futures – Closing Price

Brent crude oil futures for January 2011 delivery ended the week at $85.75 on the ICE Futures Exchange, $1.42 higher than last week’s close of $84.33 a barrel.

Both Brent and WTI oil futures declined in light trading yesterday and oil prices maybe under some downward pressure because of a stronger dollar, making US dollar denominated crude oil and other commodities more expensive for buyers in other currencies.

However, some analysts believe that oil futures may well have support because of the situation unfolding in the eurozone.

“In the same way that gold benefits from financial factors like a weaker US dollar, we are now seeing signs that oil is starting to benefit as a kind of safe haven.” said Peter Beutel, of trading advisory firm Cameron Hanover.

Financial Bailout for Portugal Next?

It was reported yesterday that officials from Germany’s finance ministry said that a rescue package for Portugal would reduce the chances of Spain needing a bailout.

Borrowing costs for eurozone states, especially Portugal, rose in response to the news. The reports were later strongly denied by the German government and the EU.