Brent steady at $108, after 2.5% plunge

Friday, 21 October 2011 02:51 - - {{hitsCtrl.values.hits}}

Brent crude held steady at $108 on Thursday, after plunging 2.5 percent in the previous session on worries a failure to come up with a plan to prevent the euro zone’s debt crisis from worsening may hurt oil demand growth.

French President Nicolas Sarkozy flew to Frankfurt to talk with German Chancellor Angela Merkel to try and break a deadlock ahead of a crucial meeting this weekend. Most markets from Asian stocks, grains, gold to the euro fell as a result of the uncertainty and fears Europe’s problems may worsen and spread across the globe.

Brent crude rose 15 cents to $108.54 a barrel at 0240 GMT, after plunging $2.76 to settle at $108.39 on Wednesday. US crude, which expires on Thursday, fell 25 cents to $85.86 after dropping $2.23 to settle at $86.11.

“Investors don’t want to take positions until there is a clear sign of a resolution of the debt crisis,” said Tetsu Emori, a fund manager at Astmax Co Ltd in Tokyo. “Fundamentally there are factors to support prices, but the economic uncertainty is weighing on sentiment.”

Still, stemming a further slide in prices is data from the US Energy Information Administration that showed crude and petroleum product stocks in the world’s biggest oil consumer fell sharply last week as crude imports reached a 10-month low and refineries cut processing rates.

Crude stocks fell 4.73 million barrels to 332.9 million barrels in the week to Oct. 14 compared with an analysts poll by Reuters that had projected a 1.8-million-barrel build on average. Gasoline stocks fell 3.32 million barrels to 206.27 million barrels, compared with projections for a 1.3-million-barrel fall. -Reuters