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Brent Improves On Geopolitical Worries

ByBenzinga
AuthorBenzinga
Published 06/25/2013, 08:21 AM
Updated 05/14/2017, 06:45 AM
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Brent crude oil ticked up on Tuesday morning after flooding in Canada added some support to prices. The commodity traded at $101.91 at 9:40 GMT on Tuesday.

CNBC reported that Canadian oil pipelines responsible for moving nearly one million barrels of Alberta oil sands crude per day remained closed after record flooding in the nation created problems. A spokesman for the pipeline's operator told reporters that a spill was discovered over the weekend, which led to the closure of the main line.

Geopolitical worries also helped to prop up Brent prices after violence in several Middle Eastern countries fueled fears that the Syrian civil war was expanding. The conflict seemed to have spilled over the Syria's borders after fighting in Lebanon and bombings in Iraq were reported.

However, a lackluster global demand outlook kept a lid on prices. Brent hit a three week low on Monday after the Federal Reserve announced its plans to cut back on its $85 billion per month bond buying plan later in the year. Most investors saw the announcement as a signal that central banks' stimulus money, which has propelled investment in commodities, was nearing its end.

The announcement's silver lining was that the bank's decision to pare its bond buying program was the result of a strengthening US economy. With the number one oil consuming nation on the road to recovery, some investors are hoping to see demand pick up.

The opposite is true for China, whose attempts to stop excessive credit growth have been unsuccessful so far. Moving forward, investors will be watching as Chinese central bankers give their take on the nation's recent struggles at a press conference in Shanghai later on Tuesday.

BY Laura Brodbeck

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