Brent oil price hovers at $101, continues to follow stock markets

5 October 2011 5 October 2011

SylviaHunt30

Brent oil prices open today’s trading session hovering around $101 a barrel and continues to follow general stock market direction, whilst recovering from yesterday’s lull that saw Brent oil drop below the psychologically significant $100 a barrel level.

Latest Brent Oil Price

In London, Brent crude oil futures for November 2011 delivery was trading at $101.79 a barrel, 08.05 GMT this morning on the ICE Futures Exchange.

Stock Markets and Oil

European stock markets opened higher this morning indicating most of the Euro markets will snap a three day decline, amid speculation Euro policy makers are examining more measures to shield banks from the sovereign debt crisis.

However, once again, it’s the bank shares that are making gains and pushing stock markets higher.

“European equity markets are set to open higher as US indices stage a late rally. What sparked the huge surge of buying or short covering was apparently an article in the FT suggesting that EU finance ministers will coordinate a bank re-capitalisation.” Jonathan Sudaria, a trader at London Capital Group, wrote in emailed comments.

Some of the biggest banks in France, Germany and Belgium hold tens of billions of euros in sovereign bonds from struggling peripheral eurozone countries, which have seen their bond values plummet amid fears Greece is close to defaulting on its debts.

“It’s clear now that the European banking system needs to be strengthened and needs more capital.” said George Osborne, Britain’s chancellor.

Both Brent and WTI oil futures have been tracking stock markets higher and lower as the European debt crisis surrounding Greece continues to dictate market direction.

“It looks like we’re just following the equities. I hate to say that, but we don’t provide much leadership to the marketplace, we just seem to follow.” said Andy Lebow, a trader and broker at MF Global.

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