Oil Prices Jump at Worsening Supply Conditions
Supply concerns escalated on Thursday, pushing Brent crude oil prices back up around $112. Brent traded at 112.780 on Friday morning, a massive increase from Wednesday's prices.
European Central Bank President Mario Draghi reiterated his vows to protect the euro at a press conference on Thursday, easing investor worries about the region's debt crisis. Demand worries have plagued oil prices recently, with the eurozone at the forefront. The market showed renewed confidence in a stable future for the 17 member countries, driving up the value of the euro.
Investors have long worried about oil supply problems, as tensions run high in the Middle East over Iran's nuclear development program. Recent comments by Israeli Prime Minister Benjamin Netanyahu caused the market to speculate that the sanctions already in place would soon turn to an embargo, or even a war.
The trouble in Tehran took a backseat to news of Turkey's artillery strikes on the Syrian border. Turkey's strike came after a mortar killed two women and three children in the border city of Akcakale. For 18 months, the Syria has suffered through an uprising, and this violence spilling over its borders was condemned by the United Nations. The BBC released a statement from the United Nations on Friday that stated the mortar "highlighted the grave impact the crisis in Syria has on the security of its neighbors and on regional peace and stability".
In addition to the Middle Eastern turmoil, Reuters reported two refinery fires in Russia and the United States. The larger fire, in a 560,500-barrel per day Exxon Mobile refinery in Baytown, Texas, is said to have affected production but was contained to one processing unit. News of the fires caught the market's attention and drove oil prices up four percent.
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