Brent Down As Demand And Stockpiles Outweigh Tensions

Oil prices remain caught between worries on both the future supply and demand for the commodity. Wednesday morning began with Brent trading a bit lower than Tuesday, at 114.00. The reduced prices are attributed to investor fears about future demand for oil as the world's top economies grind to a halt. At the forefront of these worries is the eurozone, specifically Spain. The country was allowed to keep its investment-grade rating by Moody's Investors Services which eased fears of an even weaker euro.

Demand Fear
The boost had a positive effect on Brent prices, but not enough to recuperate losses caused by investors' fear of diminishing demand.

Supply concerns have propped up oil prices as fighting between Syria and Turkey continues to create an unstable climate and threatens to interrupt the delivery of Iraqi oil. The conflict began with border violence spilling into Turkey, and has escalated to Turkey's refusal to allow Syrian aircraft into its airspace.

New sanctions imposed by the West on Iran's oil production and banking sector have also caused uncertainty on the supply side. The nation's nuclear development has long been disputed by the U.S. and EU, but Iranian officials have resisted efforts to quash the program, claiming they need this technology for electricity.

Looking To Saudi Arabia
While tension in the Middle East has caused unease about supply interruptions, CNBC reported on Wednesday that many are looking to Saudi Arabian output and crude inventories to find that the world's supply will more than satisfy the global need for oil. Saudi officials have pledged to keep the world supply of oil up, and to lower prices in order to stimulate the world's economies.

September output data showed that the kingdom has been keeping its word. Between that and the current data on crude inventories, many expect supply concerns to diminish. Today, the Energy Information Administration is set to release data regarding stockpiles, which many are forecasting to have grown significantly.

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