Brent Crude Oil Rises on Supply Fears
Brent Crude Oil traded at 112.15 on Tuesday morning, a steady increase from last week's volatile price swings. Supply interruption fears and a global economic slowdown has kept the commodity from swinging high or low so far this week.
Fears about China's most recent economic data have put downward pressure on oil prices, as the nation has historically been one of the top consumers. The World Bank has revised its forecast for Chinese growth in 2013 from 8.6 percent to 8.1 percent.
Instability in the eurozone added weight to the commodity on Monday as well. European officials met to discuss plans for the region and emerged with a new fund aimed at preventing future crises. This fund, called the European Stability Mechanism, is said to have 500 billion euros set aside for lending. While the news eased investors' minds about the breakup of the currency, many were disappointed at statements from German Finance Minister Wolfgang Schaeuble, who claimed that Spain would not need a bailout.
Even with economic woes pressuring crude oil prices, the risk of supply interruptions has proved stronger and pushed prices to a steady increase. This is largely the result of ongoing violence between Turkey and Syria, who are moving into their sixth day of artillery fire. According to CNBC on Monday, Turkish President Abdullah Gul has claimed Turkey was prepared to do anything required to protect themselves, and that he believed the “worst-case scenarios” were presently playing out.
The fighting remains at the border, but the conflict has made the market nervous, as escalation to neighboring countries could impact oil supply to the West. Iraqi oil, transported through pipelines in Turkey, could see disruptions if the violence continues.
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