Brent oil trading back near $115, follows stock markets higher

Brent oil futures open today’s trading session back near $115 a barrel, following Asian and European stock markets higher, boosted on hopes that political settlements in Greece and Italy could help resolve the EU debt crisis.

Latest Brent Oil Price

In London, Brent crude oil futures for December 2011 delivery was trading at $115.07 a barrel, 08.10 GMT this morning on the ICE Futures Exchange.

Stock Markets

European stocks opened cautiously higher Tuesday, following the gains on Wall Street, though the worsening political backdrop in Italy may mean any upside will be short lived.

Asian stock markets were mixed today amid caution over Europe’s debt woes. Japan’s Nikkei Stock Average was off 1.2 percent, Australia’s S&P/ASX 200 was up 0.5 percent, South Korea’s Kospi Composite lost 0.5 percent, China’s Shanghai Composite Index rose 0.3 percent and Hong Kong’s Hang Seng Index added 0.4 percent.

Trouble with Iran

Brent oil futures have been tracking stock markets recently, however a breakaway from this trend remains as investors weighed firm seasonal crude oil demand together with the prospect of possible oil supply disruption from Iran against concerns over Italy’s sovereign debt risk.

“The news on Italy is affecting sentiment, but prices will be supported by seasonally strong demand due to the cold winters in China and Europe. Iran is the wild card. If there are sanctions on exports, that will change the situation dramatically.” said Ken Hasegawa, commodity derivatives manager at Newedge Brokerage, Tokyo.

A report from the UN’s nuclear agency due out tomorrow is expected to show that Iran’s nuclear program is geared to develop weapons.

“The Iran situation is raising oil, especially Brent, because the IAEA is expected to come out with evidence that is pretty damning.” said Bill O’Grady, chief market strategist at Confluence Investment Management, St. Louis.

Brent Oil Price Premium

Brent’s premium to US crude rose to more than $19 a barrel and a push to move it back up toward $20 in a recovery from its recent $15.94 low on 31st October also helped lift Brent oil prices, brokers and traders said.

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Brent oil trading back near $115, follows stock markets higher