LONDON: Oil prices traded just below 10-month highs on Monday, keeping shares under pressure on fears over the impact of rising energy costs on global growth, while the European Central Bank's second offer of cheap money to euro zone banks mid-week supported the single currency.
A weekend meeting of 20 finance ministers failed to reach an agreement on making more funds available to Europe to fight its debt crisis but put pressure European Union leaders to take fresh move at their summit later in the week.
Brent crude fell back below $125, touching a low of $124.07 a barrel, after prices had surged to 10-month highs in Asian trade as tensions over Iran's disputed nuclear programme raised fears of supply disruptions.
The rise in oil prices over the past week has depressed demand for commodities and raised fears over company earnings, undermining a two-month rally in equity markets.
"Up until now higher oil prices were seen as a sign of improving growth, but oil is reaching levels where it will have a negative impact," said Richard Falkenhall, currency strategist at SEB in Stockholm.
European stocks opened down 0.3 percent at 1,072.64 points but is more than 25 percent up from the 2011 low it hit in September.
The euro held steady around $1.3440 after it rose to its highest since early December of $1.3487 on Friday ahead of the ECB's next offer of cheap long-term loan to banks.
German Bund futures fell around 21 ticks 138.82 with traders citing selling orders triggered by a break below the psychologically important 139.00 level.
Comments
Comments are closed.