Geopolitical risks support prices but weaker crude demand caps gains
I / Singapore January 22, 2013, 10:04 IST
Oil prices were mixed in Asian trade today on geopolitical concerns triggered by a bloody showdown between Islamists and Algerian forces, with weaker crude demand capping gains.
"On one hand, we have geopolitical risks that are supporting prices," said Victor Shum, managing director at IHS Purvin and Gertz in Singapore.
But he said price rises were being limited by oversupply amid weaker demand, saying there were fears of "an oversupply in the physical market that puts downward pressure on oil".
There are also worries in the market of a supply disruption following the seizure by Islamic militants of a gas field in Algeria and a bloody rescue mounted by government forces.
Algeria is a member of the OPEC oil cartel and analysts fear that any escalation of the conflict could lead to supply disruptions.
Algerian Prime Minister Abdelmalek Sellal said 37 foreigners of eight nationalities were killed by the militants in the well-planned attack on the remote facility, some of them executed with a bullet to the head.
A total of 29 Islamists were killed and three captured in the siege, which ended in a final showdown on Saturday between special forces and the remaining militants holed up in the sprawling gas complex.
Raised tensions in the crude-producing Middle East push up prices