Brent crude oil hangs at $103 a barrel as price nears 6 month lows on European debt crisis

Brent crude oil prices are trading near 6 month lows on Thursday, hanging near $103 a barrel as oil and other commodities saw big falls in May, mainly due to investors bailing out of European assets for the safe haven US dollar.

Latest Brent Oil Price

In London, Brent crude oil futures for July 2012 delivery was trading at $103.75 a barrel, 12.12 GMT today on the ICE Futures Exchange.

Meanwhile, US WTI oil prices are poised for the biggest monthly drop in more than three years in New York on speculation Europe’s worsening debt crisis and a slowing US economy will reduce fuel demand.

“The problem is not only in Greece but several countries in Europe. Prices have fallen on the pessimistic expectations of the global economic recovery.” said Ken Hasegawa, a commodity derivative sales manager at Newedge Group in Tokyo.

“Brent oil prices have continued their slide,” said Michael Hewson, an analyst at CMC Markets trading group.

“It would seem that markets appear more concerned about the more immediate problem of Europe imploding than background noise in the Middle East.”

European Demand Destruction

“We’re seeing demand destruction across the board,” said Jonathan Barratt, chief executive officer of Barratt’s Bulletin, a commodity-markets newsletter in Sydney. “I was looking for a Middle Eastern premium to be built in, but Spain’s concern seems to be overriding that and filtering through the whole commodity complex. People are scared to spend.”

The countries using the euro accounted for about 12 percent of global oil demand in 2010, according to BP’s annual Statistical Review of World Energy released in June. The US accounted for about 21 percent.

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Brent crude oil hangs at $103 a barrel as price nears 6 month lows on European debt crisis