Brent oil prices open today’s trading session near $111 a barrel after a steep sell off in commodity markets saw oil futures fall heavily and the ICE Brent oil contract lost $10.92 to end yesterday at $110.27 a barrel.
Latest Brent Oil Price
In London this morning, Brent crude oil futures for June 2011 delivery was trading at $110.64 a barrel, 07.50 GMT on the ICE Futures Exchange.
Commodity Bubble Warnings
There have been a series of warnings in recent weeks from experts that this year’s bubble in commodity prices have not been supported by fundamentals of supply and demand.
Analysts at Goldman Sachs warned its clients to sell oil, cotton, copper, soybeans and platinum in a surprise note last month. Another alarm bell came from the IEA, which cautioned it had begun to see the first signs of a downturn in oil demand.
However, some analysts think the recent falls are more of a short term correction in oil prices and other commodities including silver and gold.
“There’s no doubt that commodities became extended but I’m not seeing anything approaching panic. I’ve no feeling that this is going to be more than just a slight pullback yet, but if the news continues to deteriorate, I would assume that markets will follow that.” said Tom Gidley-Kitchin, mining analyst at Charles Stanley.
US Dollar Strengthens
In addition, the US dollar strengthened around one percent yesterday against most major currencies, which helped speed up the oil futures sell off.