Brent oil price may slip back under $100 as demand and debt drives the market

26 September 2011 26 September 2011

SondraHunter

Brent oil futures open the week’s trading session lower, near $103 a barrel as debt concerns in Europe continue to drive stock markets and oil prices lower, while oil demand could fall off a cliff as the latest China statists could show.

Latest Brent Oil Price

In London, Brent crude oil futures for November 2011 delivery was trading at $103.52 a barrel, 05.45 GMT this morning on the ICE Futures Exchange.

Europe’s Debt Concerns

European policy makers face mounting pressure to step up efforts to contain Europe’s debt crisis as US Treasury Secretary Geithner warned over the weekend that failure to combat the Greek led turmoil threatened “cascading default, bank runs and catastrophic risk.”

“There’s concern that the European debt crisis will spread.” said Takashi Hiroki, chief strategist at Monex Securities, Tokyo.

Brent oil prices have been following stock markets lower as traders and investors run for cover, bailing out of commodities including oil and gold futures.

Chinese Oil Demand

China’s apparent oil demand was 38.02 million metric tons in August, or an average of 8.98 million barrels per day, the lowest level since October 2010, according to a Platts analysis based on statistics recently released by the Chinese government.

“Several analysts have even predicted that China’s oil demand will decelerate further in the third and fourth quarters due to a combination of weak economic outlook and a high base of comparison for the second half of 2010.” said Calvin Lee, Platts senior writer, China.

Meanwhile, general fears about the world economy have weakened demand for crude oil, according to a Qatari Oil Minister.

Brent Oil Price Forecast

Brent oil futures may fall to $92.86 a barrel over the next three months, while US WTI NYMEX crude oil could fall to $64 a barrel by the end of 2011, according to Reuters market analyst Wang Tao.

Brent oil prices were last under $100 a barrel way back in February.

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