Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery ended Friday’s trading session at $112.04 a barrel on the ICE Futures Exchange, or 0.6 percent lower on the day.

Lower Oil Prices

Oil prices should fall because global supply is outweighing demand, according to Saudi Arabia’s oil minister, Ali al-Naimi.

“We want a lower price than where it is now. We need to get the price to a level of around $100 a barrel for London’s Brent crude.” al-Naimi said in Australia over the weekend.

Brent oil prices, a benchmark for more than half the world’s crude oil, have dropped 6 percent this month amid concern Europe’s debt crisis will worsen and curb fuel demand in the west.

Euro v Dollar

The euro slid to a 3-1/2-month low in volatile trade on Friday as political uncertainty in Greece spurred risk aversion.

The euro has dropped against the US dollar in eight of 10 sessions for a cumulative 2.4 percent decline, hit by the turmoil in Greece. Inconclusive election results last Sunday threw Greece into political disarray and raised the risk that it could exit both the euro zone and the EU.

Recent economic data has pointed to recession across Europe and could cause the ECB to take action sooner rather than later, compared with the United States, which is still seeing growth, although at a slower rate.

“I think those factors are all going to come together to lead to a further down leg in the euro. We would target something in the low to mid-1.20s over the next six to 12 months.” said Tom Higgins, global macro strategist at Standish Mellon Asset Management in Boston, which has assets under management of about $92 billion and is currently shorting the euro against the dollar.

A higher US dollar tends to weigh on commodity prices and Brent crude is priced in dollars.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery was trading at $112.92 a barrel, 09.09 GMT today on the ICE Futures Exchange.

“Any Greek related news is going to have a bigger impact than usual, there is still a lot of uncertainty. With demand for oil looking bleak and rising inventories, I don’t expect crude oil prices to rebound any time soon.” said Miguel Audencial, a trader with CMC Markets in Sydney.

US Oil Inventories

Signs of rising supplies globally also weighed on oil prices. US crude oil inventories rose 3.65 million barrels last week, the EIA said in its weekly report, more than analyst expectations. But the inventory boost in the EIA data was much less than a rise of 7.8 million barrels reported by the American Petroleum Institute on Tuesday.

Analysts said the uncertainties in Europe were complicating the outlook for China and other dynamic economies.

China Growth Concerns

“You’re seeing significant economic forces within the European Union slip into recession … that causes problems for a Chinese economy that is all about growth, and really can’t handle any set-backs,” said Sean McGillivray, vice president and head of asset allocation for Great Pacific Wealth Management in Oregon.

“When you look at an export-driven economy like China, whose main customers are contracting, you cannot say that they are going to be able to just internalise all of their demand.”

“Brent keeps stalling and finding resistance trying to get back to its 200-day moving average and US crude is running into support and can’t make a decisive move below its 200-day average,” said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery was trading at $112.75 a barrel, 14.37 GMT today on the ICE Futures Exchange.

Brent oil prices have fallen every day since 1st May declining well over 5 percent since the start of the month.

Problems In Europe

Trading was choppy and Brent and US crude managed recoveries from multi-month lows hit early that attracted bargain hunters. The euro and US also rallied off lows as the shock of the election results wore off.

“It finally dawned on everyone that a socialist leading France is not the same thing as, say, a socialist leading America.” said John Kilduff, partner at Again Capital LLC.

“The policies will not be that different and, in fact, the commodity markets will get some support from the lurch toward stimulus and away from strict financial repression.”

Brent June crude dipped 2 cents to settle at $113.16 a barrel at close on Tuesday. It earlier slumped to $110.34, the lowest intraday price since 30th January and marking a 14 percent retreat from the 2012 peak of $128.40 hit in March.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery was trading at $118.29 a barrel, 08.07 GMT today on the ICE Futures Exchange.

European Stock Markets

European stocks opened lower Monday as investors consolidated some of last week’s gains ahead of some key events later in the week which may see Brent oil futures fall further.

The political landscape in Europe will be in focus following weekend events in France and the Netherlands. The first round of the French presidential elections held Sunday confirmed that the two front runners go on to the second round.

The preliminary results showed Hollande ahead with 28.8 percent of the votes, compared with Sarkozy’s 26.1 percent. If elected, Mr. Hollande will call for the renegotiation of the European treaty on fiscal discipline.

In the Netherlands, early elections look likely, following the collapse of budget talks.

London’s FTSE 100 Index opened 0.7 percent lower at 5732.42, Germany’s DAX index was down 1.23 percent at 6666 and Paris’s CAC 40 Index decreased by 1.1 percent to 3153.25.

Banks, which have huge exposure to Europe’s debt problems were down 1.4 percent, while basic resource stocks fell 2 percent after HSBC’s Flash Purchasing Managers Index showed China’s factory output was still contracting, although the index did tick higher.

Lower stock markets will continue to drag on the price of oil in the short term however questions over oil supply from Iran are still in support of higher crude oil futures.

Tightening western sanctions on Iran over the Islamic Republic’s disputed nuclear programme helped send Brent oil prices hit $128 a barrel in March, the highest level since 2008.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery was trading at $118.42 a barrel, 08.18 GMT today on the ICE Futures Exchange.

Spanish Bond Auction

A more challenging longer term debt sale looms on Thursday, when Spain attempts to sell 2 and 10 year bonds, even as an auction of 12 and 18 month Spanish debt earlier this week was considered a success. Investors see the sales as a test of demand for the country’s debt.

“There is potentially a good upside if yields are low. However, if Spain’s cost of debt breaches the six percent barrier, expect a sell off in equities and commodity instruments and a shift to the safe haven of US and German treasuries to emerge.” Miguel Audencial of CMC Markets wrote in a note on Thursday.

“With the highest unemployment rate in the Euro zone and returning into recession this year, Spain is in danger of entering a debt/recession spiral whilst it seeks to reassure on its commitment to fiscal austerity.” DBS Bank said in a commentary.

Iran Nuclear Programme

However, Brent oil prices found some support by renewed concerns over West Asian supply owing to the standoff between key producer Iran and the West over Tehran’s nuclear programme.

“The situation with Iran is still a supporting factor because it is still not resolved after the talks.” said Mr Ken Hasegawa, energy desk manager at Newedge brokerage in Japan.

Meanwhile, 15 people have been arrested in Iran accused of conspiring to assassinate one of the country’s nuclear specialists, Tehran declared on Wednesday. An Israeli spy base in a neighbouring country has also been uncovered.

­Iran’s Intelligence Ministry says the arrested group spied for Israel. It also linked the group’s activities to a series of killings of Iranian nuclear scientists. Since 2007 the assassination spree has left at least 5 top Iranian nuclear experts dead, delivering a massive blow to the country’s energy program.

Latest Brent Oil Price

In London, Brent crude oil futures for June 2012 delivery was trading at $118.53 a barrel, 08.15 GMT today on the ICE Futures Exchange.

Brent to WTI Oil Spread

The Brent to WTI spread, which rose to as high as $21.91 a barrel at the start of this month, narrowed to just $13.63.

The spread was also affected by the decline in Brent to a two month low after Iran said on Monday it had agreed to further talks with western countries over its nuclear programme next month.

Goldman Sachs said the widening of the WTI-Brent spread was caused by a sharp fall in Canadian crude on the physical markets as inventories have risen sharply around ­Chicago.

This in turn caused more oil to flow from Chicago to Cushing, which then was shipped back to Wood River in Roxana, Illinois.

However, the bank added that, with the Seaway reversal easing the bottleneck at Cushing, WTI prices would rise closer to Brent prices in the second half of this year.

“I think it’s the big unwind of two markets, Brent and RBOB, that were out of proportion to the rest of the complex.” said a New York based trader.

Iran’s Nuclear Program

Also helping to cap Brent prices and reduce the premium to US WTI crude were Saturday’s talks about Iran’s nuclear program. The revived discussions with Tehran and major powers eased the threat of immediate supply disruptions in the region.

The specter of a regional conflict as Iran declined to curb its disputed nuclear program helped Brent prices surge to a 2012 peak above $128 a barrel in March, a 19 percent rise from the end of 2011.

Recovering Libyan oil exports and higher output from Saudi Arabia and Iraq helped check the price surge, along with the West mulling strategic reserve releases as governments around the globe fretted about the effect of high oil prices on economic growth.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2012 delivery was trading at $118.01 a barrel, 07.59 GMT today on the ICE Futures Exchange.

Inadequate – More Sanctions Needed

However, US lawmakers on Monday pushed for more sanctions against Iran after talks between Tehran and global powers failed to stop Iran from developing its nuclear program.

“The United States should not mistake positive diplomatic dialogue for compliance with United Nations Security Council resolutions,” said a spokesman for Republican Senator Mark Kirk.

Kirk and several other U.S. legislators have been pressuring the White House to get tougher on Iran and are pushing for a range of additional penalties that would further isolate Iran and prevent it from trading with the rest of the world.

President Barack Obama warned on Sunday there would be more sanctions imposed on Iran if there was no breakthrough in talks in coming months.

Iran’s foreign minister said Tehran was ready to resolve nuclear issues if the West starts lifting sanctions.

Iran and the group of world powers, which comprises the five permanent members of the UN Security Council – the US, Russia, China, France and Britain – plus Germany, have agreed to reconvene talks in Baghdad May 23.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2012 delivery was trading at $122.17 a barrel, 08.03 GMT today on the ICE Futures Exchange.

Futures on the Euro Stoxx 50 Index expiring in June lost 1.5 percent to 2,291 at 07/30 GMT, while FTSE 100 Index futures retreated 0.9 percent after European markets were closed yesterday for the Easter Monday holiday.

Meanwhile, pressures on the sovereign debt front continue in Europe as the market keeps an eye on rising bond yields in Spain and Italy.

“There have been a range of issues in Europe which will probably do little to appease sentiment.” said Chris Weston, institutional trader at IG Markets.

US Job Numbers

US stock markets dropped yesterday after a report showed that American employers added 120,000 jobs in March, the fewest in five months and less than the median economist forecast of 205,000 in a Bloomberg survey. The amount had exceeded 200,000 for three straight months.

The US jobs report presents a challenge that stocks have overcome nine times during the bull market that’s driven the S&P 500 up 107 percent in three years.

US and European stock markets were shut for the Good Friday holiday on April 6, when the Labor Department released its employment report.

Iran Nuclear Program Talks

Oil prices are also under pressure ahead of talks taking place this week between Iran and major global powers, including the US and China over the country’s nuclear program.

Negotiations between Iran and world powers over Tehran’s disputed nuclear program are due to take place on April 14 in Istanbul. The resumption of talks after more than a year tempered worries about an immediate cut in oil supply.

Back in January, Pentagon chief Leon Panetta said the United States was fully prepared for any confrontation with Iran over the Strait of Hormuz, but said he hoped a dispute would be resolved peacefully.

Tehran threatened last December to close the strait, where one fifth of the world’s traded oil passes through, in the event of a military strike or severe tightening of international sanctions over its disputed nuclear program.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2012 delivery was trading at $123.06 a barrel, 07.56 GMT today on the ICE Futures Exchange.

Last Friday, Brent crude oil futures for May delivery rose $0.49 to settle the week at $122.88 a barrel.

Strategic Oil Reserves

Western countries could tap their strategic oil reserves to try to rein in rising oil prices, as several are considering, but analysts warn it may have only a limited and temporary effect.

It’s important to save strategic oil reserves for when they’re really needed. If oil reserves are drawn upon every time oil prices trade higher, eventually the reserves will be gone, leaving no buffer to deal with genuine emergencies.

Last week, French officials disclosed that Washington had proposed dipping into it’s oil reserves, the clearest indication yet that major consuming nations may act to counter the recent surge in prices. The comments pushed down both Brent and WTI oil prices but they began to climb back up on Friday as it became clear that no moves were imminent.

With Brent crude soaring over $126 a barrel in London at the beginning of last month, levels unseen since 2008, there are increasing concerns fuel costs could damage a still fragile global recovery.

Analysts doubt that that a coordinated release of oil stocks by major industrialised nations, which they did during the Libya conflict last year, would have a lasting effect on oil prices.

“A tactical use of the reserves would certainly have an impact on the market but it would be temporary because the underlying problem is an increase in demand while supply is limited by constraints on production.” said Luca Baccarini at Energy Funds Advisors.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2012 delivery was trading at $124.94 a barrel, 07.57 GMT today on the ICE Futures Exchange.

Iran Oil Sanctions

Tightened sanctions by the West have yet to dissuade Iran from pursuing its controversial nuclear programme but have triggered an oil price spike that could trigger a global recession.

Brent oil prices hit a record high in euro terms earlier this month and analysts now believe they may have already dragged the eurozone into recession.

New sanctions by the US and EU against Iran have ratcheted up tensions and the price of oil as traders worry about the risk of hostilities, including an attack by Israel on Iranian nuclear facilities.

“There is time to solve this diplomatically, but time is short. Iran must act with the seriousness and sense of urgency that this moment demands. Iran must meet its obligations.” said US President Obama yesterday, who will discuss the issue with the leaders of Russia and China late Monday.

The US and the European Union are imposing sanctions on Iran to halt its nuclear program. The Persian Gulf nation has threatened to shut the Strait of Hormuz, a transit route for a fifth of the world’s oil, in response to an embargo on its crude.

The IEA estimates that exports from Iran could plunge by about 800,000 barrels per day to one million bpd in the second half of the year after the tighter Western sanctions go into force.

Strategic Oil Reserves

The high oil prices have clearly become a worry to Western governments.

French energy minister Eric Besson commented that France and other industrialised countries were considering releasing part of their strategic crude reserves to keep oil prices down.

Last week Obama discussed such a possibility with visiting British Prime Minister David Cameron, the White House had confirmed.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2012 delivery was trading at $123.61 a barrel, 08.06 GMT today on the ICE Futures Exchange.

Economic Data

Factory activity in China, one of the biggest engines of global oil demand growth, shrank in March for a fifth straight month, with the rate of contraction accelerating and new orders sinking to a four month low.

The report put oil and stock markets on a bearish trajectory in trading yesterday.

Oil prices also dropped on Thursday after data showed a sharp fall in French and German factory activity that even the most pessimistic economists failed to predict.

“There’s a far greater chance of a soft landing, but there will be more doubts from time to time, and sentiment has turned quite rapidly bearish today in Europe.” said Filip Petersson, commodity strategist at SEB in Stockholm.

Analysts said oil prices had also been hit after France said industrialised countries were considering releasing part of their crude stockpiles to counter rising prices.

“The French announcement is definitely having a downside effect on prices.” said Justin Harper, market strategist at IG Markets Singapore.

European Slowdown

News that the composite ‘flash’ PMI for the euro zone fell to 48.7 in March, its lowest level for three months, from 49.3 in February, when a rise to 49.6 had been predicted added to gloom and stock markets in Europe headed lower.

It was the fact that German manufacturing activity slumped back into contraction in March that particularly weighed. For some time Germany has been the economic powerhouse within the euro zone, and the fall in its manufacturing PMI to 48.1 from 50.2 in February, against consensus expectation of a climb to 51.0, disturbed investors.

“Higher oil prices might explain the weakness in the manufacturing PMIs in March as industrialists face a further squeeze in their profit margins whilst prospects for future demand remain sluggish.” said Annalisa Piazza at Newedge Strategy.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2012 delivery was trading at $124.58 a barrel, 07.01 GMT today on the ICE Futures Exchange. The European oil contract closed off yesterday’s trading session at $124.16, or 1.2 percent lower.

Oil Price Concerns – IMF

IMF chief Christine Lagarde warned Tuesday that crude oil prices may spike by up to 30 percent if Iranian supplies were disrupted, causing “serious consequences” for the global economy.

Traders said the market remained cautious about the potential for consumer countries to release emergency stocks in the face of high prices and the potential for disruption to normal supply lines, when the July 1 embargo on European Union imports of Iranian crude takes effect.

Oil prices moved broadly last week after reports, denied by the US, that the UK and US had agreed on a plan to tap reserves soon.

“Clearly it would be a shock to economies if there was a major shortage of exports of oil out of Iran, it would certainly drive up prices for a period of time.” Lagarde told reporters in New Delhi, wrapping up a two day visit.

The IMF has calculated that an interruption in oil supplies from Iran could increase oil prices by 20 to 30 percent, said Lagarde, who arrived in India at the weekend from neighboring China.

A 30 percent rise for Brent oil futures would put the contract at over $160 a barrel, surpassing the 2008 oil price shock and record of $147.

“A sudden and brutal rise in the price of oil from Brent crude’s current levels of $125 a barrel would have serious consequences on the global economy until other oil exporting nations were able to bridge the gap.” she added.

“The bulls are in control and the thinking seems to be to err to the upside.” said Tom Bentz, director, at BNP Paribas Prime Brokerage.

Latest Brent Oil Price

In London, Brent crude oil futures for May 2012 delivery closed Friday’s trading session at $126.04 a barrel on the ICE Futures Exchange, or 2.8 percent higher on the day.

Oil Prices to Go Higher Still

“The market will hold here, or move higher. Iran shows every sign of remaining a source of tension, the struggle in Syria looks like it will be a prolonged stalemate, and the extent to which Saudi can fill the supply shortfall, and for how long, is unknown.” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who last month correctly predicted Brent’s rise above $120 a barrel.

Brent Oil Price at $130 a Barrel

In December of 2011, Goldman Sachs forecast the price of Brent crude oil at $130 a barrel in 2013, saying crude oil prices will continue to rise in order to slow demand growth, even in a poor economic growth environment.

According to Goldman, crude oil prices will have to move sharply higher in 2012 to respond to the tightness in physical markets, before moving lower to factor in the potential damage from the feared global economic recession.

“We continue to view the crude oil market as navigating between the currently tight physical oil markets and the threat that the European debt crisis could trigger a global economic recession in the near future, which would lead to a sharp drop in oil demand,” analysts said in a note.

Goldman Sachs’s New York-based head of energy research, David Greely updated this forecast on Friday saying “On a 12 month horizon we see Brent prices at $127.50.”

Oil Prices Out of Control

Meanwhile, declining oil production rates at oilfields in OPEC member countries have accelerated precipitously and will continue to worsen, according to analysts at Bank of America Corp.

Adding to the predictions, a recent report from Reuters said that top exporter Saudi Arabia and other Persian Gulf producers say surging oil markets are beyond their control and prices could spike higher unless tensions between the West and Iran subside.

Mr Ali al-Naimi oil minister of Saudi Arabia and Mr Abdullah al Badri OPEC Secretary General are expected to focus on high oil prices in their addresses to the International Energy Forum gathering of oil ministers and executives.

Persian Gulf OPEC oil ministers said that they would prefer to see Brent oil trading at around $100 per barrel, rather than current levels of around $126, that they fear could hurt the global economy and lead to a repeat of a spike and subsequent collapse in oil prices in late 2008.

Brent crude oil prices averaged $110.78 a barrel in 2011 and $80.32 in 2010.