Brent gains as geopolitical uncertainties in the Middle East linger
The front-month ICE Brent contract has moved $0.20/bbl higher on the day from Friday, to trade at $71.95/bbl at 09.00 GMT.
PHOTO: An oil barrel. Getty Images
Upward pressure:
Brent’s price moved higher on Monday after a rapid rebel offensive that began in November toppled President Bashar al-Assad’s government in Damascus on Sunday.
“The fall of Syria's government is stirring the geopolitical pot in the Middle East, posing potential implications for Russia and Iran, both staunch allies of Syria,” SPI Asset Management’s managing partner Stephen Innes said.
The news has sparked fresh concerns about political instability in the oil-rich Middle Eastern region, which is already amid a full-blown Israel-Hamas conflict, market analysts said.
“This development could nudge oil prices slightly higher,” Innes added.
Downward pressure:
Last week, the Saudi Arabia-led OPEC+ group decided to delay any increase in oil production until April 2025, a move aimed at stabilising oil prices. However, the announcement has weighed on Brent’s price.
“By constricting supply, OPEC+ risks losing market share to non-OPEC producers, particularly those in the United States,” Innes said.
OPEC’s decision has further reflected the Vienna-headquartered coalition’s cautious outlook on global oil demand growth for next year.
“This move, aimed at stabilising oil prices, may not achieve its intended effect,” Innes added.
By Aparupa Mazumder
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