Brent crude oil traded steadily at $104.62 on Monday morning at 5:58 GMT as the commodity inched towards $105 on improving economic data and strong equity markets. However, a tepid demand outlook and market oversupply kept a lid on prices.
Last week, the International Energy Agency forecast both waning oil demand growth and increasing supply which put pressure on Brent prices. At the moment, the markets are well supplied; and with most of the world's largest consumers struggling to kick start their economies, crude demand has shown no signs of improvement.
Tension in the Middle East escalated over the weekend and reignited concerns about a supply interruption in one of the largest oil producing regions. CNBC reported that Lebanese Hezbollah militants fought alongside Syrian troops on Sunday and attacked a rebel-held town.
The event prompted Israel to threaten more attacks on Syria in an effort to keep the militia in check.
The Syrian civil war has been keeping Brent prices afloat as it rages on and creates tension in the oil rich region. Although Syria itself is not essential to the movement of oil, many are concerned that as the fighting escalates, the country's neighbors will be drawn into the conflict.
Moving forward, investors will be waiting for the release of minutes from the Federal Reserve meeting, due out on Wednesday. Most will be looking to the minutes for clues about the Fed's position on continuing its stimulus plans. The release of the Fed minuets is expected to have a significant effect on markets as any hint of a policy change could lead to a spike in the dollar.
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