Brent oil price falls to $103 as markets become volatile and uncertain

Brent crude oil fell nearly 4 percent in trading yesterday and opens today’s session around $103 a barrel as all markets become volatile to corrections following news and data out of the US and China that have put traders back on sell mode.

Latest Brent Oil Price

In London, Brent crude oil futures for August 2013 delivery was trading at $102.84 a barrel, 07:47 GMT this morning after closing at $102.09 on Thursday on the ICE Futures Exchange. The contract lost 3.8 percent yesterday and traded below $102 a barrel earlier today.

Trouble in China

All major markets have been impacted by manufacturing data out of China as manufacturing activity from the world’s number two economy contracted at a faster pace in June with the flash manufacturing purchasing managers index falling to 48.3 in June from 49.2 in May. The index is now at its lowest level in nine months.

Meanwhile, Wednesday evening’s announcement by the US Fed also spooked investors as there seems to be clearer evidence that QE in America will be tapered back in the near future, however this is a fiercely debatable subject amongst many analysts and investors alike.

Volatile Markets

Both Brent and WTI crude oil prices took a hit from the news, however gold and other commodities also suffered as well, whilst global stock markets fell across the board.

Wall Street suffered its worst day of the year Thursday, one day after Federal Reserve chairman Ben Bernanke raised fears the central bank may be preparing to wind down its stimulus policies this year.

“I think volatility is the new norm as investors in all asset classes try to re-price what the world looks like in the absence of quantitative easing. That’s not an easy thing to do.” said Art Hogan, managing director at Lazard Capital Markets.

US Dollar Impact on Commodities

The US dollar has risen versus its main trading partners since Thursday’s open as seen by strength in the US Dollar Index which is trading near 82 this morning. The strong US dollar weighed on commodities that are priced in the US currency. Gold prices plunged 6 percent yesterday to the lowest level since September 2010. Volatile markets are back in fashion.

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Brent oil price falls to $103 as markets become volatile and uncertain