Naturally, traders analysing the oil markets recently have focused largely on the internal struggles within Syria and the global response to its use of chemical weapons. However, as time has progressed the likelihood of military action has reduced, and the driving force behind crude has softened.
Now that fears have eased, other issues that have been overshadowed are coming back to the fore. We are once again trying to assess the political stability of Egypt. Only yesterday, car bombs were still going off in Cairo, showing that the incumbent government still has its troubles. It is unlikely that it will be forced to shut or even disrupt the flow of traffic using the Suez Canal, but that is always a concern.
Brewing in the background is OPEC’s inability to vote in a new figurehead. Currently all the member states have put forward a candidate from their own country, and none have been willing to give their support to any of the other candidates. Ultimately this will be resolved, and at the moment it only looks like political manoeuvrings to engineer allegiances. However, this does damage the group’s ability to show a unified front in steering global prices and so to increase or decrease supply to the markets.