Brent oil price struggles to hold at $100 as Shell forecasts further weakening ahead

Brent oil prices open Thursday’s trading session back at $100 a barrel after punching back through the three digit marker yesterday, however CEO of Royal Dutch Shell forcasts that oil prices will weaken further in the second half of 2012 as demand reacts to a slowing global economy.

Latest Brent Oil Price

In London, Brent crude oil futures for July 2012 delivery was trading at $100.07 a barrel, 08.04 GMT today on the ICE Futures Exchange, or 0.4 percent lower.

Brent crude earlier this week dropped to 16 month low below $96.00 a barrel as worries about the euro zone crisis persist. After topping $128 per barrel in March amid concerns about tension between the US and Iran, the price of Brent crude fell to a 16 month low of $95.63 per barrel on Monday, before recovering some ground.

Europe Recession and Oil Demand

Peter Voser, CEO of Royal Dutch Shell says “global demand is softening; we have got recessionary elements in Europe, a small slowdown in Asia Pacific. At the same time, some of the geopolitical elements of price volatility over the past few months have receded, we see a softening of oil prices which I expect to go well into the second half of this year.”

Brent futures fell to levels last seen in the fourth quarter of 2011 as investors and speculators sold off oil contracts, spurred by uncertainty that governments may fail in preventing a systemic financial crisis in Europe, David Greely, head of energy research at Goldman Sachs, in New York said in a report dated yesterday.

“However, oil prices could recover rapidly if countries act to stave off concerns and boost economic growth,” he said.

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Brent oil price struggles to hold at $100 as Shell forecasts further weakening ahead