Brent oil price near $75 as markets eye IMF funds decision

19 July 2010 19 July 2010

BonTrade

Brent oil prices open the week’s trading near $75 as news yesterday evening that the IMF and EU has suspended a review of Hungary’s funding programme is sure to have European markets on a back footing, however oil prices are holding up.

In London, Brent crude oil futures for September 2010 delivery was at $75.25 at 07.00 GMT on the ICE Futures Exchange.

In the eurozone, analysts at Informa Global Markets said uncertainty over Hungary’s funding programme has prompted a steep rise in the country’s funding costs.

European markets are therefore braced for a volatile day of trading today after €20bn financing deal for Hungary is taken away.

The move, which was described by economists as “very rare”, means that Hungary will not have access to standby funds that were secured as part of a 2008 loan deal. The credit line was suspended on Saturday after the European Commission voiced concerns over the newly-elected Hungarian government’s budget plans.

The move by the IMF and EU will reignite fears in global stock and money markets, however oil prices seem to be holding onto recent gains.