Brent oil prices are trading back near the $83 mark this morning as stock markets in Asia fell amid reports that China had raised reserve requirements for banks to cool lending.
Brent crude oil futures for November 2010 delivery was trading at $82.92 a barrel, 07.45 GMT this morning on the ICE Futures Exchange.
Mixed Asian Stock Markets Affecting Oil Prices
Japan’s benchmark Nikkei 225 stock index fell 176.18 points, or 1.8 percent, to 9,412.70 after being closed for a holiday Monday. However, China’s Shanghai Composite Index was up 0.4 percent at 2819.08 while markets in Singapore, Taiwan and India fell.
Tey Tze Ming, a trader at Saxo Capital Markets in Singapore, said China’s order to the country’s top six state owned lenders to reportedly increase reserves by 0.5 percentage points to 17.5 percent of deposits “is adding to the general pessimism” in markets.
“The reserve hike is used as a clear signal to commercial banks that the central bank is willing to take actions to control lending.” said Goldman economists Yu Song and Helen Qiao in a report.
Brent Oil Futures and the Currency Mix
“We still anticipate a fresh round of highs and an ultimate crude oil price advance toward the $87 area. However, such an outlook is predicated on our assumption that the euro will be posting fresh highs.” said Jim Ritterbusch of Ritterbusch & Associates.