Brent oil price lower near $122 as stock markets fall on Greece default fears

The price of Brent crude is trading near $122 a barrel on Wednesday after global stock markets slumped on fears that Greece will default on it’s crippling debt saw oil prices and other commodities follow suit.

Latest Brent Oil Price

In London, Brent crude oil futures for April 2012 delivery was trading at $122.41 a barrel, 07.05 GMT today on the ICE Futures Exchange.

The European oil contract closed off yesterday’s session at $122.13.

Greece Default Fears

Greece on Tuesday threatened to default on payments to any bond investor that doesn’t participate in a debt restructuring that is central to international plans for a rescue of the ailing country.

Meanwhile, the sell off continues with Asian stock markets falling again today as jittery investors awaited a deadline for Greece to get sufficient support from its private creditors for a debt reduction deal or face default.

“The market is starting to feel tired and the worries about Europe are seeping back into the market.” said Tom Bentz, director at BNP Paribas Prime Brokerage.

The biggest concern in markets is a deadline Thursday for Greece’s private bondholders to accept a deal to swap their Greek government bonds for replacements with a lower face value and interest rate.

The swap is vital for Greece to cut its debt and get a bailout of €130 billion ($172 billion) from other countries and the International Monetary Fund. Without the bailout, Greece could default on its debt later this month and rattle markets and commodity prices around the world.

“Rumours that a slack participation rate by private investors in the Greek bond swap might force Athens to extend the deadline beyond Thursday are likely to keep investors at bay. The last thing markets want to see is uncertainty.” according to Stan Shamu, market analyst at IG Markets, Melbourne.

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Brent oil price lower near $122 as stock markets fall on Greece default fears