The price of Brent oil futures dived under $108 a barrel this morning in early trading, giving up yesterday’s modest performance as Asian stock markets once again lead the way lower on concerns over the situation surrounding Greece.
Latest Brent Oil Price
In London, Brent crude oil futures for December 2011 delivery was trading at $107.96 a barrel, 07.20 GMT this morning on the ICE Futures Exchange. The European oil contract closed off yesterday’s session at $109.73, up 0.1 percent.
Asian Stock Markets Fall
Asian stock markets fell again this morning for the fourth straight day as a European deal to bail Greece out of a massive financial mess appeared to be on the verge of unravelling.
Hong Kong’s Hang Seng index fell 2.2% to 19,301.50, South Korea’s Kospi lost 1.3% to 1,872.87 and Australia’s S&P ASX 200 lost 0.7% to 4,155.10. Japanese markets were closed for a national holiday.
“The whole thing has become a mess and will certainly keep risk assets shackled in the short term, on the premise that there is a real possibility that Greece may vote against the revised bailout and austerity and subsequently find themselves having to fund their massive deficit.” Stan Shamu of IG Markets in Melbourne said in a report.
The uncertainty about what lies ahead for the EU as well as the subset of countries that use the euro currency, hit Asian energy stocks hard.
Hong Kong listed PetroChina, the country’s biggest oil and gas company fell 2.9 percent, while state owned coal miner China Shenhua Energy lost 1.7 percent and Energy Resources of Australia was down 3.2 percent.
Oil Prices and Stock Markets
Analysts are forecasting that both Brent and WTI oil prices could fall during the weeks ahead as investors mull the possible impact of Greece rejecting the latest debt plan, which would clearly send stock markets lower still.
However, JP Morgan expects Brent oil prices to average $115 next year amid falling crude oil inventories and low spare production capacity of oil suppliers.
“The oil market is very tight and that means it can easily rally by $10 to $20 in a blink on seasonal demand or supply side issues.” the bank said.