Brent oil prices are trading around the $84 a barrel mark this morning as stock markets open Friday’s session mixed but Chinese stocks end the day up over three percent.
In London, Brent crude oil futures for December 2010 delivery was trading at $84.02, 09.00 GMT on the ICE Futures Exchange.
Stock Markets and US Dollar Still Moving Oil Prices
European stock markets opened flat today with the UK’s FTSE 100 up just 7.69 points at 5,734.90. UK Sterling jumped in early Asian trading to hit $1.6065 – £1 as the US dollar came under heavy selling pressure yesterday.
A weak dollar is the main factor for higher oil prices but it seems that Brent oil futures have moved little since the week’s opening price and is in fact down on Monday’s opening rate.
Meanwhile in China, the Shanghai Composite Index closed at 2,971.2, extending its sixth consecutive daily rise. The Chinese index rose 8.4 percent for the week, its largest weekly rise since February 2009.
Some analysts expect the sluggish economic recovery in developed countries will undermine consumer demand and keep oil prices below mid $80 levels. But looking at the recent oil consumption and market figures coming out of China, it’s difficult to see this theory stacking up.
“With oil production to remain the same and the global economy hanging on, I see the price of oil staying between the range of $85 and $75 for the near future,” said Mike Sander of Sander Capital Advisors.
Goldman Sachs Says Buy Oil
However, Goldman Sachs reiterated its recommendation to buy the December crude contract, and it sees oil prices rising to $92 in three months and $101 in 12 months.
“We expect the supply and demand balance to continue to tighten in the fourth quarter of 2010 as continued global economic growth, albeit likely at a slower pace than in the first half continues to strengthen oil demand.” Goldman Sachs said in a recent report.