Brent crude Oil futures have slipped for a sixth day due to continuing concerns over the state of the global economy and the wane in demand for oil. Despite the fall the price of a barrel remains above $109.
The continuing high price comes after fears over the state of the global economy were revived after the world’s largest producer of tractors and diggers Caterpillar Inc (CAT) warned that global demand is waning faster than they expected. The company’s announcement added to concerns emanating from the Middle East. Increasing violence in the Lebanon, protests in the oil rich nation of Kuwait and the ongoing civil war in Syria have raised concerns over potential supply disruptions.
“People can’t seem to get their heads around the global growth outlook,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity research firm. “There is no clear indication on how the global economic growth issue will be tackled by policymakers.”
Barratt expects oil to continue trading in a tight range until after the presidential election in the United States, the world’s top oil consumer, which should bring clarity to the government’s policies and budget.
The increasing violence in the Middle-East is of great concern to the global markets. In Kuwait, riot police fired teargas and stun grenades as well as carrying out baton charges in an attempt to disperse tens of thousands of protestors angry at changes to the nation’s electoral law. In Lebanon up to seven people were killed in gun battles between Shia and Sunni groups, raising the prospect that the Syrian conflict could be spreading across the region.
Artillery exchanges between Syria and Turkey are continuing and observers are concerned that the Syrian conflict could spread into the country. Reports abound that some Turks of Arab origin who share Assad’s Alawite beliefs are growing increasingly critical of Ankara’s open support for rebels fighting the Syrian leader.
“Does the Turkish government really think that everyone will like them when this is all over? Only when Assad is gone will the real war start,” said Aydin, an Alawite shopkeeper in Hatay’s provincial capital Antakya near the Syrian border.
“The government is playing a sectarian game here. They are trying to divide our community. Whether you were Sunni, Alawite or Christian never even mattered here before. To ask would even be dishonour. But things are changing,” he said.
Commodity based currencies depending on oil such as the Canadian Dollar weakened today as it suffered due to a weakening in its key export. The commodity fell by 2.1% its lowest level in more than two weeks.
As of 12:00pm
The Pound to Euro exchange rate is currently trading at 1.2291
The Pound to US Dollar exchange rate is currently trading at 1.5981
The Pound to Australian Dollar exchange rate is currently trading at 1.5560
The Euro to US Dollar exchange rate is currently trading at 1.3001
The Euro to Pound exchange rate is currently trading at 0.8135
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