Syria and Turkey Conflict Push Up Crude Oil

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This morning US NYMEX oil futures prices are trading below$91.5/bbl, with a marginal loss of 0.20 percent. Most of the Asian equities are trading higher except Japan market as Bank of Japan refrained from further easing and kept the interest rate unchanged. With the premium of a Syria and Turkey civil war, we may expect oil futures prices to hold a positive stance till the US session, ahead of jobs data. Concern of supply disturbances in Middle East may support more to Brent oil futures than WTI. There is no major economic release from Euro-zone, except German factory orders which may continue to remain weak and may limit gains during European session. Today is another crucial day for oil futures as Global market is eyeing on US monthly jobs data in the evening. Analysts expect US payroll numbers for manufacturing sector to remain weak whereas a twist in the jobs number may be expected ahead of Presidential election.

Crude oil ended sharply higher yesterday, rebounding from a four percent decline yesterday. The recovery came on supply concerns from the Middle East after tensions between Turkey and Syria escalated. Oil prices held on to the gains after minutes of the Federal Reserve’s policy meet showed members agreed to a third round of quantitative easing last month, due to the uncertainty prevailing in the economy.  Crude prices rebounded after news reports said Turkey continued to shell Syria in retaliation to an artillery attack on a border Turkish town in which five people were killed. Reports also say Turkey’s parliament has empowered Prime Minister Recep Tayyip Erdogan to send troops into Syria following the developments yesterday.

Crude oil markets are well supplied and inventories remain adequate, Saudi Arabia’s oil minister Ali al-Naimi said on Thursday, reiterating that the world’s top oil exporter can and will meet any additional demand.

Natural gas prices are holding $3.4/MMBTU, up by more than 0.40 percent in Globex electronic platform. Ahead of US monthly jobs data due for today, we may expect gas prices to take some cues out of this. The US Energy department reported that natural gas stocks increased by 77 BCF in the last week lower than prior week. Thus, slower pace of stock injection may support gas to trade on higher side

The National Hurricane Center reports that tropical storm Oscar is expected to dissipate today. This may also create some pressure in oil and gas it will ease any supply disturbance in Gulf region.

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About: FX Empire Analyst - Barry Norman

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