Crude pauses for breath as fears ease

Crude oil’s charge higher has paused as it awaits further developments from the major protagonists in the Syria affair.

The Olie - Brent Crude chart shows that the region of $116-118 has brought out sellers as the bullish trends have been reversed. This has coincided with increased flows from OPEC who are keen to stabilise the price. This resistance though is going to be under considerably more pressure this time around if the US does decide to take the fight to Syria.

Today is the start of the latest G20 summit and it is hard to imagine that the Mediterranean issues will not be high on the agenda. One of the more problematic issue facing the US is that Russia are so opposed to military action, because they have the rights to a naval base on the coast of Syria. The importance of this shouldn't be underestimated, as Russia does not have any natural coastal waters to the Mediterranean and so have had the base in Syria since the 1970s.

We are beginning to come to the end of the northern hemisphere’s summer and there will naturally be a higher demand for oil soon. This, along with the continuing improvement in both sentiment and manufacturing, should see demand rise.

Daily Brent Crude (Oct) (5 Sep 13)

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