2011-08-15
Brent Oil Price retreats To $108 after Greece Debt Deal
I have been wondering for a long time now whether or not the price of Brent crude oil really has anything to do with supply and demand. The opening of Friday last trading saw Europe’s Brent oil spot hovering around $107. This was in response to what’s happening in the European economy.
In order to stop the contagious nature of debt all across Europe, European leaders agreed on a $159 billion bailout for Greece on Thursday. There is however fear that Greece may end up defaulting in its payment of the debt. And this is what affects the oil price? It so difficult to wrap my head around this, I might need Brain injury compensation if I think on this too long.
In London, the price rose to about $117.92 this morning. Even if it fluctuates, the fluctuation is not expected to be wide by Tuesday morning.
The bail out for Greece is sure to ease a lot of financial pressure on the government. But it is hope the ease will not be short lived. The hope is that the relief will end up bringing about something tangible, such as economic stability.
The agreement to aid the Greece was reached on Thursday during an emergency summit held for that purpose. The funding is expected to aid the Greek government to finance some of its activities. The private finance sector contributes $50 billion out of the said amount. This led to the oil price coming down a bit as traders were not sure what the future of the European economy will be. There are a few other countries in the union that are in a serious debt situation. So will this mean that oil prices will rise in the near future?
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