The oil price is being affected by conflicting sentiments today, as the latest global terrorist atrocity raises the prospect of both a hit to supplies and a slump in demand.
As news of the tragedy in Paris broke on Friday, the price of international benchmark Brent crude was below $44 a barrel.
This rose slightly in Asia overnight and Brent was trading at around $44.85 on Monday morning in Europe, as traders cited the potential hit to supplies if reprisal attacks on Syria were to worsen the crisis across the region, the Wall Street Journal notes.
But Daniel Ang, an analyst with Phillip Futures Ltd, told the paper the rally would not be "big".
He said prices, which at below $45 remain near multi-year lows and are loss-making for much global production, would not be hugely influenced by events in Syria as it has not been a significant oil exporter for some time.
He and others argue the market remains substantially oversupplied – and there is even concern that the outcome of the attacks in Paris could be reduced demand for oil, which would weigh further on prices.
Reuters cites an official from the Opec cartel as saying tougher travel controls in the wake of the attack could have a material impact on consumption.
"Certainly any more controls - though it ensures safety of travellers - will reduce transport. Look at what happened after the September 11 attacks," the official said.
Concern over demand could also be affected by the news that Japan's economy is back in recession, which will adds to concerns that slowing global economic growth will reduce oil demand.
Source: www.theweek.co.uk
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