LP:Brent oil trading at $108 as global stock markets sell off
Brent oil futures open today’s trading session back around $108 a barrel as global stock markets sell off again after the US Fed’s pessimistic assessment of the American economy and the perceived ineffectiveness of measures taken to kickstart growth again.
Latest Brent Oil Price
In London, Brent crude oil futures for November 2011 delivery were trading at $108.57 a barrel, 08.05 GMT this morning in electronic trading on the ICE Futures Exchange.
Stock Markets Sell Off
On Asian stock markets, Japan’s Nikkei 225 slumped 1.6 percent to 8,598.32 and South Korea’s Kospi slid 2.6 percent to 1,806.62. Hong Kong’s Hang Seng dived 3.6 percent to 18,138.32. Australia’s S&P/ASX 200 was 2.2 percent down at 3,984.40.
European stock markets also opened lower this morning. London’s FTSE 100 Index slipped 2.6 percent to 5154.97, the DAX in Frankfurt was 3.2 percent lower at 5251.88 and the CAC-40 in Paris fell 2.7 percent to 2857.41.
“Oil seems to have fallen in line with equity markets. Prices shouldn’t have fallen so low, based on just oil fundamentals.” said Tony Nunan, a risk manager with Tokyo based Mitsubishi.
Meanwhile, the US dollar surged to a seven month high against major currencies after the latest moves by the US Fed boosted the dollar.
Federal Reserve policy makers indicated they are willing to do more to keep the American economy from sliding into another recession as they made their second move in as many months to reduce borrowing costs.
A firmer dollar makes crude oil more expensive for holders of foreign currencies and tends to weigh on oil prices.
