Crude oil and Brent prices rose on Tuesday for the first time in three days as worries over supply mounted due to escalating tensions in the Middle East that could disrupt oil production in the north of Iraq and its transport to Europe and the US.
Tensions between Syria and Turkey increased to their worst since March after cross-border firing accidentally killed some Turkish civilians last week, causing Istanbul to boost its military presence along the Syrian border, said CNBC.
“Right now the market is concerned about the continuing conflict between Syria and Turkey, and the worry is that if it escalates, it may disrupt Brent supplies,” said analyst Ker Chung Yang from Phillip Futures in Singapore.
Crude is trading as of this writing at $89.80 per barrel, with the lowest for today being at $89.28 and highest at $90.31 although the Dollar Index rose towards the 78.30 level as demand on safe haven advanced after the IMF lowered its global growth forecasts.
The International Monetary Fund cut its global growth forecast today to 3.3% this year, the slowest pace since the 2009, and 3.6% in 2013, and warned that the global economy will continue to weaken unless U.S. and European policymakers will take serious actions.
So the poor outlook for the global economy is keeping the oil’s gains limited. Brent rose today about 0.5% to $122.40 per barrel, due to the political tensions between Turkey and Syria which increased caution among the market participants.