Bargain Hunters Boost Brent Prices
Bargain hunters took Brent crude oil prices higher over night after the commodity lost almost $2 on Monday. Brent traded at $106.65 at 7:25 GMT on Tuesday as investors turned their attention from the problems in Ukraine to the global demand outlook.
After Crimean citizens voted to succeed from Ukraine and join Russia over the weekend, markets were roiled as many worried about what kind of reaction the vote would draw. However, on Monday, fears of immediate military action in the region subsided and gave investors a chance to evaluate some other factors weighing on oil prices.
Many are concerned about an over supplied market paired with weakening demand growth. CNBC reported that most analysts are expecting to see a build of more than 2 million barrels in US commercial crude inventories. Two weekly data reports, due out on Tuesday and Thursday, will likely show around a 2.8 million barrel rise in the US.
Geopolitical problems kept a floor under prices as the situation in Libya continued to suppress the OPEC supplier’s exports. New protests have taken Libyan oil exports down to less than 250,000 barrels per day, and some say things could get worse.
The nation is facing an increasingly unstable clash between the government and opposition groups who demand more rights and a part of the nation’s income from oil production. If the tension continues to escalate, Libya could fall into a civil war. In many ways, the problem in Libya, although priced in, poses a larger threat to oil supply than the situation in Ukraine.
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