09 October 2012 16:38 [Source: ICIS news]
LONDON (ICIS)--Crude oil futures extended gains on Tuesday on the back of monetary easing in China and the escalation of violence between Syria and Turkey.
By 14:39 GMT, the front-month November ICE Brent contract had touched an intra-day high at $113.99/bbl (€87.77/bbl) – a gain of $2.17/bbl compared to the settlement on Monday.
The contract then edged a little lower to trade around $113.55/bbl.
At the same time, the front-month November NYMEX WTI contract was trading around $90.60/bbl, having touched an intra-day high at $90.95/bbl, a gain of $1.62/bbl compared to the close on Monday.
China’s central bank has pumped the equivalent of $42bn into the country’s economy. The injection was made via bond repurchase agreements in an attempt to boost liquidity to China’s banking system and therefore lower borrowing costs for investors.
Aside from monetary stimulus in China, the security of oil supply from the Middle East is also being threatened amid violence in Syria and Turkey.
A number of oil pipelines from the Middle East end in Turkey for western markets, including the Kirkuk-Ceyhan pipeline. Disruption to these pipelines is likely to boost oil prices and cause shortages for a number of countries.
($1 = €0.77)
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