Crude oil prices advanced in Asia Tuesday on fears that the growing tensions in the Middle East may threaten crude supplies.
Light sweet crude for the November delivery surged 0.97 percent or 87 cents to $90.20 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours. Brent crude oil futures for the November delivery gained 0.80 percent or 89 cents to $112.71 a barrel on the ICE futures exchange in London.
Oil prices advanced Tuesday despite the concerns raised by the International Monetary Fund (IMF) about the global economic growth as escalating tensions between Turkey and Syria offered support. Turkish President Abdullah Gul said on Monday that Turkey and Syria were battling the worst conflict at the moment and his country would do everything necessary to protect itself.
"Right now the market is concerned about the continuing conflict between Syria and Turkey, and the worry is that if it escalates, it may disrupt supplies," Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore, told Reuters.
The IMF Tuesday lowered the global growth forecast citing the debt crisis affecting the euro zone and the faltering U.S. economy. According to the World Economic Outlook released by the IMF Tuesday, the global economy will grow 3.3 percent in 2012, down from 3.5 percent growth it announced in July.
The IMF cut its growth forecasts for China to 7.8 percent for this year and 8.2 percent for next year saying stimulus efforts have so far failed to deliver the expected boost, sparked concern over growth slowdown in the world's second largest oil consumer. Also, the World Bank on Monday warned that the slowdown in China could get worse and last longer than what is expected now due to the uncertain global economic outlook,
On Monday, light sweet crude for the November delivery fell 0.6 percent or 55 cents and settled at $89.33 a barrel on the New York Mercantile Exchange while Brent crude for the November delivery fell 20 cents and settled at $111.82 a barrel.