Brent oil price hovers at $76 as Europe crisis bites deeper

25 June 2010 25 June 2010

BonTrade

Brent oil prices are trading around the $76 mark early on Friday as renewed questions about the European debt crisis bites deeper on speculation the G20 summit this weekend won’t decide how to tackle Europe’s debt crisis.

In London, Brent crude oil futures were trading at $76.28 midday Singapore time on the ICE Futures Exchange.

European policy makers fear failure to patch up public finances now risks reviving a bond market sell off that required a bailout for Greece last month.

European stock markets finished lower again at close on Thursday as worries about the global economy mounted following sharp declines Greek government bond prices.

The mood turned more cautious in Europe the day after the latest Federal Open Market Committee meeting said US interest rates wouldn’t rise as quickly as the market was anticipating because the recovery wasn’t gathering pace.

Greece’s 5 year sovereign credit default swaps were quoted at 1,075 basis points shortly before 1345 GMT, compared with 934 basis points Wednesday afternoon, according to data provider CMA DataVision. This means the annual cost of insuring $10 million of Greek government debt for five years has risen a further $141,000 to $1.075 million, a record.

Stock markets in Asia opened lower on Friday which tends to have a negative effect on oil prices, however the US dollar was also lower which tends to have a positive effect on oil prices.