Brent crude oil futures posted some losses on the commodity index today, as investors again expressed their concern with the long term applicability of Europe’s new debt resolution policies. The European benchmark commodity oil slid back on the charts, yet managed to hold above $108 per barrel on lingering hopes that China’s expansion efforts and the ensuing import boosts will prop up the sector for the time being.
Thought the treaty negotiated by the leaders of the European Union provided crude investors with considerable confidence early in the session, little of that enthusiasm remained when details emerged concerning the treaty, namely, the prolonged referendums and waiting periods it would take in order to take full effect. The abundance of such vague details led traders and economists to consider the possibility that the treaty may fall flat just as Europe’s previous efforts to tame its spiralling debt.
The scepticism reigning on the commodities market led to the fall of several base metals and the euro, which in turn caused a downward shift in the continent’s benchmark commodity oil.
Brent crude oil prices for January settlement lost 39 cents to settle at $108.23 per barrel on the ICE Futures Exchange in London. By comparison, crude oil in the U.S. slid 26 cents to $99.15 per barrel on the New York Mercantile Exchange.
One of the main lines of support for the oil commodity however remains strong. China’s officials announced their plans of investing more than $300 billion into Europe and the U.S., with investments ranging anywhere from crude oil to raw metals. The nation’s massive expansion efforts have been of tremendous help to the fuel throughout the year’s tumult.
Yet, a potential contagion of Europe’s equally massive debt is not likely to be countered by optimism surrounding China. The region’s economies continue to flounder in a domino-like effect, as no viable solution looms on the horizon.
By Chris Termeer