Brent oil price trading at $118 a barrel as European markets open lower

The price of Brent oil futures opens Monday’s trading session back at $118 a barrel, erasing 0.7 percent as European stock markets open lower as political tensions in Europe and mixed data from China prompted falls in banking and basic resource stocks.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery was trading at $118.29 a barrel, 08.07 GMT today on the ICE Futures Exchange.

European Stock Markets

European stocks opened lower Monday as investors consolidated some of last week’s gains ahead of some key events later in the week which may see Brent oil futures fall further.

The political landscape in Europe will be in focus following weekend events in France and the Netherlands. The first round of the French presidential elections held Sunday confirmed that the two front runners go on to the second round.

The preliminary results showed Hollande ahead with 28.8 percent of the votes, compared with Sarkozy’s 26.1 percent. If elected, Mr. Hollande will call for the renegotiation of the European treaty on fiscal discipline.

In the Netherlands, early elections look likely, following the collapse of budget talks.

London’s FTSE 100 Index opened 0.7 percent lower at 5732.42, Germany’s DAX index was down 1.23 percent at 6666 and Paris’s CAC 40 Index decreased by 1.1 percent to 3153.25.

Banks, which have huge exposure to Europe’s debt problems were down 1.4 percent, while basic resource stocks fell 2 percent after HSBC’s Flash Purchasing Managers Index showed China’s factory output was still contracting, although the index did tick higher.

Lower stock markets will continue to drag on the price of oil in the short term however questions over oil supply from Iran are still in support of higher crude oil futures.

Tightening western sanctions on Iran over the Islamic Republic’s disputed nuclear programme helped send Brent oil prices hit $128 a barrel in March, the highest level since 2008.

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Brent oil price trading at $118 a barrel as European markets open lower