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Fresh Conflict In Syria Lifts Brent Prices

ByBenzinga
AuthorBenzinga
Published 05/21/2013, 08:03 AM
Updated 05/14/2017, 06:45 AM
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Brent crude oil reached toward a two week high on Tuesday by stretching above $105 as conflict in the Middle East lifted prices and took some of the focus off of the weakening demand forecasts. The commodity traded at $105.08 at 6:04 GMT on Tuesday morning.

Rising tension in the Middle East was largely responsible for the commodity's lift after the Syrian civil war threatened to spill over the nation's borders and drag neighboring countries into the conflict. Reuters reported that Lebanese Hezbollah guerrillas were fighting alongside the Syrian army after violence breached the border between Syria and Lebanon.

Although the spreading conflict has many worried about supply interruption, most aren't expecting to see Brent trade much higher unless the current situation in Syria escalates further.

Investors are anticipating a string of disappointing data this week as initial estimates of Purchasing Managers' Indexes will be reported for China, the eurozone and the United States this week. Most are expecting the figures to reconfirm the sluggish global economic recovery that recent data from the world's top economies has suggested.

Adding to demand concerns, UBS reduced its forecast for Chinese growth to reflect weak credit expansion and credit growth.

Oversupply has also contributed to pressure on Brent as high inventories have kept a lid on prices. However, analysts are predicting a 400,000 barrel drop in US commercial crude oil stockpiles dues to higher refinery activity and lower imports. If the numbers fall in line with expectations, oil prices could see a boost later on Tuesday when the data is released.

BY Laura Brodbeck

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