Global Oil Prices Rebound with Middle Eastern Tensions

Global oil futures prices rebounded on Middle Eastern conflict in global markets recently. That helped compensate for the pledge of Saudi Arabia to satisfy the world energy markets and control prices.

The current crude price of Brent for November delivery gained $1.65 to $113.46 per barrel in London’s late trading. Meanwhile, the oil price per barrel on the NYMEX for delivery in November moved $1.99 higher to $91.32.

Oil prices are bouncing back on renewed worries regarding tensions in the Middle East, according to analyst Myrto Sokou of Sucden Financial Research.  Anders Fogh Rasmussen, head of NATO, recently cautioned against the risks of heightening conflict in Syria, saying that Turkey, a NATO alliance member, had shown admirable control in reacting to its border being shelled.

In the past week, Shells from Syria killed five individuals from a border-village in Turkey, causing a series of retaliatory attacks.

Meanwhile, the price of oil maintained its gain from the previous day in spite of Ali al-Naimi’s bearish remarks. In a ministerial meeting held in Riyadh, the oil minister told reporters that Saudi Arabia will provide whatever the markets need. Addressing co-ministers, he further cautioned that the increasing oil price per barrel would impact the growth of the global economy.

The price of oil increased in March to levels not seen since 2008 which may negatively impact the economies of developing and emerging nations. Moreover, such price increases will negatively affect world oil demand, added the oil minister.

Oil futures prices had declined in the past days as the World Bank and International Monetary Fund reduced their projection for this year’s global growth forecasts.

The IMF lowered its projection for China’s 2012 economic growth to 7.8 percent. Meanwhile, the World Bank said that it anticipated the second biggest economy of the world to grow at 7.7 percent, a slower than anticipated pace.

According to a note of brokerage Phillip Futures to its clients, the economic growth of China and petroleum demand have been main supports for the price of oil since the world’s energy demand was affected by recession following the financial crisis.

By: Chris Termeer