Oil Prices Down After Chinese Poll Lends Strength to Demand Worries
Brent crude oil traded at 113.48 on Monday, a decline after the previous week's gains. The commodity is caught in a tug-of-war between supply worries and dwindling demand, with Monday's news lending strength to demand issues and driving prices downward.
Last week, the International Energy Agency released demand growth forecasts that were significantly lower than originally calculated. The International Energy Agency (IEA) claimed that troubled European and American economies would account for much of the decline, as the slow economic growth would result in less consumption.
This news caused a price slump, which continued on to Monday after data from a Chinese poll suggested the nation's growth is at its slowest since the beginning of 2009. This caused concern for future demand for oil in China, although data out of the country also showed that its commodity imports did increase in September.
While Brent prices drop at economic news, they remain supported by tension in the Middle East where Iran and Israel continue to exchange heated statements about Iran's nuclear development program. This trouble, though significant, has taken a backseat to violence in Syria and Turkey and a possible interruption to Northern Iraqi oil supply.
What started as a spill-over of conflict into border towns in Turkey, has resulted in the deaths of five Turkish civilians and artillery exchange between the two countries. After a plane suspected to be carrying military equipment to Syria was grounded in Russia last week, the region's conflict has only expanded, roping Russia into tense relations with the Turkish government.
On Monday, Reuters reported that Turkey has taken the fighting a step further and restricted Syrian aircraft from its airspace. This development confirms that the struggle between the two nations is far from resolution.
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