Trade Arabia reported that oil rose towards USD 113 per barrel after two days of losses with tensions in the Middle East and the risk of supply disruptions outweighing concerns about sluggish global demand.
Mr Abdullah Gul president of Turkish said "Worst case scenarios between his country and Syria were now playing out fuelling concerns that the 18 month old conflict in Syria may spread to other countries in the region.”
Commerzbank research said that there are latent supply risks on the oil market since Turkey might become involved in the conflict in Syria which would affect key oil transport routes.
Analysts said that tensions between Syria and Turkey are at their worst since March after cross border firing accidentally killed some Turkish civilians last week causing Istanbul to boost its military presence along the border. This could threaten oil production in the north of Iraq and its transport to the West.
Concerns over Syria have eclipsed Iran's long running row with the West over Tehran's disputed nuclear program that has led to sanctions on Iranian oil shipments. OPEC's biggest producer Saudi Arabia has raised output to 30 year high of 10 million barrels per day helping to compensate for the cut in exports from Iran.
Mr Ali al Naimi oil minister Saudi Arabia said that Saudi Arabia would continue to pump at around that rate this month. The oil prices were still too high and Riyadh would like it to fall towards USD100. More supply is also on the way from neighboring Iraq OPEC's second biggest producer after Saudi. Exports this month are expected to rise above 2.8 million barrels per day the highest in decades and output is on course to more than double by 2020.
The International Monetary Fund cut its global growth forecast for the second time since April and warned US and European policymakers that failure to fix their economic ills would prolong the slump. For 2012 the IMF now expects global output to grow just 3.3% down from its July estimate of 3.5% making it the slowest year of growth since 2009. It predicted only a modest pickup next year to 3.6% below its July estimate of 3.9%
Source - Trade Arabia.com
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