Brent Crude Oil Rises After Volatile Wednesday
Brent Crude Oil traded at 113.620 on Thursday morning, an increase after Wednesday's volatile trading. The commodity continues to fluctuate as investors shift their concerns from supply interruptions to waning demand.
Wednesday morning saw an increase in prices as news of further violence at the border of Turkey and Syria increased fears that there could be an interruption of oil supply. Turkey plays a key role in oil supply, as Northern Iraq uses pipelines through the nation to deliver oil to the West. With no signs of slowing, the fighting in Syria and Turkey has many fearing escalation which could destabilize the whole region.
This supply concern was overshadowed later by worries of a global economic slowdown and decreased demand. On Wednesday afternoon, Chevron (NYSE: CVX) cautioned investors about falling profits and Alcoa (NYSE: AA) posted a quarterly loss, confirming fears that the world's major economies were not improving.
The International Monetary Fund also forecasted a gloomy economic future for many of the world's top economies like China and Europe. Reports from the IMF cite the ongoing crisis in the eurozone as the biggest risk to global economics, and with slow progress in the region, investors have little confidence in a quick recovery.
CNBC reported on Wednesday that the Organization of the Petroleum Exporting Countries released information that confirmed the IMF's earlier worries. OPEC has lowered its expectations for oil demand in the future, referencing global economics as its main concern.
Worries about demand have constantly pressured crude oil prices, but turmoil on the supply side has mitigated losses.
As investors wait to hear data from the US Energy Information Administration to find out inventory data, prices for crude are holding steady. The data, due out Thursday, is forecast to have an 800,000 barrel stockpile in crude inventory.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.