Brent crude slides more than $1 on euro debt fears

Singapore: Brent crude fell more than a dollar on Monday to below $102 as growing fears of the euro debt crisis spreading to other parts of the region and dampening global oil demand weighed heavily on investors.

The euro zone’s debt crisis, weakness in the world’s top oil consumer the United States and the expected return of oil exports from Libya have weighed on oil prices. The economic uncertainty pushed Brent down more than 10 percent in September for the contract’s biggest quarterly decline in five.

[caption id=“attachment_97738” align=“alignleft” width=“380” caption=“The performance of US crude was worse than Brent. Reuters”]  [/caption]

Brent crude fell $1.11 to $101.65 a barrel after hitting an intraday low of $101.25. US crude fell $1.10 to $78.10 after reaching an intraday low of $77.90.

More from Fwire

BCCI earned more than Rs 2,400 crore in IPL 2022, reveal documents Eight Russian judokas barred from world championships after Ukraine boycott

“It is an overhang of how the equity market has closed in the States. It is a confidence thing,” said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.

“It will come (down) lower on confidence. But OPEC won’t allow, I think, prices to continue to trade at those major lows. OPEC may come out and say a few words and we will just trade back at the top end of the range.”

The performance of US crude was worse than Brent, with the contract posting its weakest quarterly performance since the financial crisis of 2008.

The uncertainty pulled down copper, often a gauge for economic growth, for a fourth session in a row as investors dumped riskier assets and moved to gold and the dollar. Asian stocks extended losses after US equities ended their worst quarter since the depths of the 2008 credit crisis on Friday.

A bearish target at $99 per barrel has been established for Brent, while US oil will fall further, to $78.89 per barrel, as indicated by its wave pattern and a Fibonacci projection analysis, according to Reuters market analyst Wang Tao.

Economic outlook

Greece will miss a deficit target set just months ago in a massive bailout package, according to government draft budget figures released on Sunday, showing that giant steps taken to avert bankruptcy may not be enough.

The dire forecasts came while inspectors from the International Monetary Fund, EU and European Central Bank, known as the troika, were in Athens scouring the country’s books to decide whether to approve a loan tranche.

Without that installment, Greece would run out of cash as soon as this month.

Still, offering slight support to prices is data out of China, the world’s second-biggest oil consumer, showing that industrial activity is improving. China’s factory activity picked up in September for a second month in a row and export orders strengthened. The official purchase managers index inched up to 51.2 from August’s 50.9, largely in line with a median forecast of 51.3 in a Reuters poll.

Reuters