Brent oil price trading back under $100 a barrel as Europe debt crisis bites

Brent oil prices are trading back under $100 a barrel on Friday, a new eight month low for the oil contract as the debt crisis surrounding Europe see little signs of slowing down, biting into the price of oil and boost the value of the US dollar.

Latest Brent Oil Price

In London, Brent crude oil futures for July 2012 delivery was trading at $98.87 a barrel, 13:05 GMT today on the ICE Futures Exchange, or a big 3.1 percent lower in today’s trading session alone.

Oil’s Poisonous Cocktail

“In the oil market we have a mixture of weak demand, ample oil supplies, some nervous investors and a stronger US dollar.” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “It’s a really poisonous cocktail.”

“Brent is clearly driven lower by the bearish macro sentiment,” according to SEB commodities analyst Filip Petersson.

“Several factors are conspiring here. Europe is obvious, a new wave of contagion fear is spreading and leaders seem paralysed. US data also continues to come in below expectations even though the situation there is less acute.” he added.

Europe Debt Crisis

Oil may decline further next week on concern that the Europe’s debt crisis will spread, slowing economic growth and curbing fuel demand, a recent survey showed.

17 out of 33 analysts and traders surveyed forecast that oil prices will drop further next week. 9 respondents, or 27 percent, predicted an increase and 7 estimated prices will be little changed.

With Greece’s political and economic future remaining uncertain, along with Spain’s banking sector looking increasingly fragile, fears that debt laden Madrid could need an international bailout are on the increase.

European politicians remained divided over the best solution to the current crisis as it emerged that Spain’s citizens, alarmed by the state of their banks’ finances, began moving their deposits offshore at the fastest rate since records began.

Bank of Spain data showed a net 66.2 billion euros was sent abroad in March, the most since records began in 1990.

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Brent oil price trading back under $100 a barrel as Europe debt crisis bites