Geopolitical Tension Keeps Brent Above $106
Brent crude oil slid lower on Tuesday after PMI data added to worries about a waning global demand outlook. The commodity traded at 106.63 at 5:20 GMT as the confrontation between the West and Russia helped keep a floor under prices.
On Monday, China released worse than expected PMI figures which put pressure on Brent prices. The data added to a growing list of disappointing economic indicators and fueled worries about the nation's stalling economy.
However, concerns about falling demand were offset by the potential for a supply interruption as geopolitical problems in Libya and the standoff between Russia and the West supported prices.
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In Libya, exports remained depressed as rebel groups maintained their grip on the nation's largest oilfields and reduced Libyan oil production to less than 250,000 barrels per day. CNBC reported that the nation's El Feel oilfield was shut down on Monday due to a closed pipeline which will take Libyan exports down to nearly 150,000 bpd on Tuesday.
Meanwhile, tension between the West and Russia continued to worry investors after the Group of Seven decided to remove Russia from international decision making within the Group of Eight. Moscow's military presence in Ukraine and the annexation of Crimea has enraged world leaders and sparked concern that the Kremlin could be looking to expand further.
On Sunday one of NATO's highest ranking commanders said that a considerable number of Russian troops had been build up at the Ukrainian border and that the nation may be considering the annexation of Moldova, another former Soviet republic.
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