Brent oil price skids back to $103 a barrel as commodities sell off continues

The price of Brent crude oil opened today’s trading session back at $103 a barrel which is an eight month low and the benchmark looks likely to skid lower as demand forecast downgrades are forcing commodity prices down in line with the stronger US dollar.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2013 delivery was trading at $103.05 a barrel, 07:21 GMT on the ICE futures Exchange. The May 2013 contract expires today.

Oil and Gold Commodities Sinking

Both US WTI and European ICE Brent oil contracts are sinking lower due to a strong US dollar (as seen in the continued strength of the US Dollar Index – Currently at around 82.4) together with latest reports of oil demand downgrades this year from the big three forecasters: OPEC, the IEA and the US EIA.

“Prices have come under pressure as oil demand forecasts for the rest of 2013 have been lowered by three major industry bodies within the past few days, citing a worsening economic outlook in the eurozone as a key factor,” according to Inenco analyst Gary Hornby.

A point to mention would be that the IEA believes that European oil demand is particularly weak suggesting that this year it will be the lowest since the 1980′s. Meanwhile, the EIA expects that the Brent crude oil spot price, which averaged $112 per barrel in 2012 and rose to $119 per barrel in early February 2013, will average just $108 per barrel in 2013 and maybe around $101 per barrel in 2014.

Gold Price Melting Off Recent Highs

Meanwhile, gold prices tumbled as low as $1,490.00 an ounce on Friday, hit by the strength of the US dollar and speculation over the sale of Cyprus reserves. Prices hit $1600 an ounce just two weeks ago.

As usual there is an upside to lower oil prices as a fall in Brent crude could ease the cost pressure of a large number of European companies, especially those which use petrochemical products as a key input to their operations, including airlines and the automotive industry.

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This article was written by: JR @ liveoilprices.co.uk

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Brent oil price skids back to $103 a barrel as commodities sell off continues