As a pipeline in southern Iraq was bombed, Basra export terminal's capacity slowed affecting its crude supply. Fears filled the crude market regarding the lack of supply, nevertheless it was offset by continuing worries of a global slowdown, as concerns that energy demand will dampen, especially by the biggest crude consumer, the US, is discouraging investors to enter the crude market and current investors lock in on profits, which has a negative impact on oil prices.
Knowing that last Friday, the US stock market recorded losses dragged in part by declining energy companies shares, the weakened demand on energy caused crude contract to shed $1.96 recording a high of $107.63 per barrel and a low of $104.71 per barrel.
Crude supply risks are starting to fill the market, supporting slightly prices from deepening the fall, as the dispute between Turkey and northern Iraq continues. Turkey forces attacked 15 members of the Kurdistan Workers Party Thursday, causing investors to feel more anxiety. Traders started to walk away from crude oil markets also by the weak confidence and locking in on profits, especially as inflation is not a predominant worry and therefore oil as a hedge investment has lessened in the past period; prices are still declining as the contract opened today at $105.12 recording a high of $105.20 per barrel and a low of $104.34 per barrel.
As long as geopolitical tensions continue in Iraq between the government and militia of El-Mahdy, crude's fall will slow as it is provided with more resilience while supply and demand fears balance, that along with expected further dollar weakness may boost oil this weak if demand fears were offset in the marketÃ¢â‚¬Â¦