Brent oil price trades at $77 as stock markets head lower

8 September 2010 8 September 2010

BonTrade

Brent oil open’s trading around the $77 mark on Wednesday amid weaker global stock markets as investors grew concerned that high oil stockpiles in the US would continue to weigh on oil prices.

In London, Brent crude oil futures for October 2010 delivery was trading at $77.35, 09.00 GMT on the ICE Futures Exchange.

“When equities are lower, it leaves the oil market open to supply & demand factors, which have been bearish, to one degree or another, since the second half of 2008. There is a consensus emerging that economic growth is not going to be strong enough to eat into the existing surpluses.” said Peter Beutel of Cameron Hanover.

Asian stock markets were broadly lower after Wall Street declined amid concerns over the health of European banks, with the region’s financial stocks getting hit. Oil prices also shrugged off a weaker US dollar, which fell against its major counterparts.

Brent oil prices ventured lower early in today’s trading session as European stock markets dip lower.

Meanwhile, an analysis of the recent stress tests on Europe’s banks showed the test understated some lenders’ holding of potentially risky government debt, re-igniting fears about the global economy and sending investors fleeing risky assets.