Brent crude oil found support on Wednesday and traded near $110 after tension in the Middle East renewed investor worries about supply interruptions. The commodity traded at $109.80 on Thursday, a marked improvement from Wednesday morning's prices.
The support came from a recent Israeli attack on Palestinian militants in Gaza. CNBC reported that Hamas' military chief was struck and killed in his car by an Israeli airstrike. Israeli officials are claiming that this attack will not be the end of their assault on the Gaza Strip, and that more strikes are imminent.
The ongoing fighting in Syria is also adding to the region's instability as the fighting continues into its twentieth month. The conflict, which has dragged several of Syria's neighboring countries into fighting, has already damaged an oil pipeline, confirming fears that fighting in the region could result in supply shortages.
In Iraq, several car bombs killed 14 people as a Muslim festival began to celebrate the beginning of the Islamic year. This coupled with the fact that oil exports decreased to 2.04 million barrels per day because of bad weather on Tuesday has caused investors to turn their attention to the area.
Though supply worries are supporting prices, the threat of waning demand has created a ceiling for gains. With the US fiscal cliff looming, uncertainty in the number one oil consumer has put pressure on Brent prices. Europe's economic woes are also weighing on Brent prices and as the financial crisis deepens, many are expecting things to get worse before they get better.
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