Brent crude drops to under US$ 125/bbl.

Brent crude prices dropped by over US$ 1 on Monday, bringing an end to four straight days of gains. The drop in price has largely been associated to the two key factors that have dominated many of 2012’s headlines: the stalling global economy and tensions in the Middle East.

European economies have taken a battering in recent months, with many either contracting sharply or, for the more fortunate countries, finding themselves unable to show any signs of real growth.

China has contributed to the negative atmosphere surrounding the global economy after it released export data, which showed a record trade deficit, with reduced sales and lower industrial output.

Tensions in the Middle East have been the main driving force behind rising fuel prices in 2012. The diplomatic row over Iran’s nuclear programme has repeatedly made front page news as military threats, including a blockade of the vitally important Strait of Hormuz, and biting sanctions have caused worries about global supplies.

However, international talks on the crisis are due to begin soon. Despite the fact that the talks may not achieve anything, concerns over an immediate crisis or conflict in the region have been reduced.

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