Brent oil trading at $103 but prices remain on a downward slope

Brent oil futures open Thursday’s trading session at around $103 a barrel, capping several days of losses, however oil prices remain on a possible downward slope if stock markets continue to sell off around the world.

Latest Brent Oil Price

Brent oil futures for November 2011 delivery were trading at $103.48 a barrel, 09.25 GMT this morning on the ICE Futures Exchange.

“Crude oil prices rebounded and rose more than 2 percent, supported by a strong rebound in the stock markets.” said Sucden brokers analyst Myrto Sokou.

Stock Market Panic

The panic stricken reaction of world stock markets over the past few days reflects a growing mood that a Greek debt default will not be managed and orderly but messy, with knock on effects not just for the rest of the eurozone but for the entire world economy.

Markets have responded nervously to headlines out of Europe for weeks, fearful that a Greece default could lead to a lockup in the global financial system, similar to the one triggered by the collapse of Lehman Brothers in September 2008.

Oil prices have been tracking stock markets recently, as the European debt situation plays out.

Brent crude will trade an average 1 percent higher than yesterday’s closing price of $102.73 a barrel during the final three months of the year, according to the mean prediction of 10 analysts. Crude oil futures lost 8.6 percent in the third quarter, extending a 4.2 percent drop in the second.

“The outlook is deteriorating more and more, and the velocity is somewhat alarming. The risks to forecasts right now are to the downside, and not just on demand.” said Eugen Weinberg, head of commodities research at Commerzbank AG who predicts Brent oil prices may average less than $100 a barrel in the fourth quarter of 2011.

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