Brent Under Pressure From Poor Global Demand
Brent crude oil tumbled on Wednesday after poor demand outlook and rising stockpiles put pressure on prices. The commodity steadied at $107.16 on Thursday morning at 11:00 GMT after falling more than three percent on Wednesday.
Jobs data from the US that indicated the nation's recovery wasn't as strong as some had thought decreased the global demand outlook and sent Brent prices downward. The commodity plunged even further after reports showed that US oil inventories were at their highest level since 1990.
Problems in the eurozone have also contributed to the downward pressure on crude prices. Following Cyprus' botched bailout plans, the eurozone released disappointing manufacturing data that proved the nation was still deep in recession. Without growth in factories, oil demand in the eurozone is unlikely to pick up.
Moving forward, investors will be looking for any indication of improved economic health from more US jobs data due out on Friday. According to CNBC, the current stunted global economic growth could push Brent prices as low as $105.66.
However, Brent could find support from supply worries this weekend as Western diplomats are set to meet with Iranian officials to discuss Tehran's nuclear development program on Friday and Saturday.
Tension over Iran's nuclear capabilities has long supported Brent prices as Iranian oil exports have been heavily sanctioned in an effort to cut funding to the program. Now, the two sides will discuss easing the sanctions in return for a promise to curb the nuclear program.
News that North Korea was threatening an attack on the United States that had the potential to involve nuclear weapons has also kept investors attention. President Obama announced that he would be sending missile defense system to Guam in response to the threats.
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