Brent oil prices hovers at $112 as European debt situation eats into markets

Brent oil prices open today’s trading session around $112 a barrel as the ongoing debt situation surrounding Europe continues to eat into stock markets that are again loosing ground in Asia after the US Dow Jones closed lower late on Monday.

Latest Brent Oil Price

In London, Brent crude oil futures for December 2011 delivery was trading at $112.60 a barrel, 08.05 GMT this morning on the ICE Futures Exchange. The December 2011 Brent contract expires today.

Uncertainty Over Europe

Asian stock markets fell for the first time in three days after a surge in Italian borrowing costs intensified concern that Europe’s debt crisis will worsen.

Hong Kong’s Hang Seng Index sank 1.1 percent, Japan’s Nikkei 225 Stock Average lost 0.4 percent and Australia’s S&P/ASX 200 Index retreated 0.4 percent.

“There is still a lot of uncertainty over Europe. Last night’s decline was a correction but the downside will be limited from a technical point of view.” said Ken Hasegawa, a commodity trading manager at Newedge Group, Tokyo.

At KBC Energy Economics analysts said “Once again, oil prices are responding more to geopolitical tensions than the accident waiting to happen that is the European debt crisis.”

“As bond yields in Italy soared to what many believed to be unsustainable levels of 7 percent and above, and the new Greek coalition government flounders as it tries to pass austerity measures that will allow the next tranche of aid to be paid, oil prices have remained strong. North Sea Brent oil futures, which hit a high of $116.48 on 8th November, currently stand at $112.”