Brent oil hovers near $109 as Italy downgrade adds to Euro gloom

Brent oil prices open today’s trading session hovering around $109 a barrel as Italy had its sovereign credit rating downgraded by Standard and Poor’s, which is keeping the country’s outlook on negative, adding to a gloomier picture in the Euro zone.

Latest Brent Oil Price

In London, Brent crude oil futures for November 2011 delivery was trading at $109.11 a barrel, 07.00 GMT this morning on the ICE Futures Exchange. Brent fell with stock markets yesterday, closing 2.6 percent lower at $109.27.

Italy Downgrade

Standard and Poor’s cut Italy’s government debt rating to A from A+ and said Italy’s economic growth prospects were getting weaker, with planned reforms by the Italian government not expected to help much.

“We believe the reduced pace of Italy’s economic activity to date will make the government’s revised fiscal targets difficult to achieve.” S&P said in a statement.

Italy follows eurozone partners Spain, Ireland, Greece, Portugal and Cyprus in having its credit rating downgraded this year.

Meanwhile, Asian stock markets extended losses as news of Italy’s credit rating downgrade prompted heavy selling in financials and exporters shares across the region.

“Standard and Poor’s surprise downgrade on Italy will likely add to concerns of contagion in the eurozone debt crisis.” noted United Overseas Bank analysts.

Both Brent and WTI oil prices have been tracking stock markets this month as the Euro debt situation evolves into something which could spiral out of control.

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Brent oil hovers near $109 as Italy downgrade adds to Euro gloom