Oil Drops as Uncertainty and Oversupply Drive Price to Near $40

Oil prices edged lower on Monday as investor concern about the economic impact from Friday’s deadly attacks in Paris, claimed by Islamic State, and a global glut of crude supplies kept prices in check.

France carried out large-scale air strikes against Islamic State sites in Syria overnight and lingering fear after Friday’s attacks increased uncertainty over the outlook for the euro zone economy.

“Friday’s dreadful events and their aftershocks all threaten economic growth; hence the market is coming lower,” PVM Oil Associates analyst Tamas Varga said.

Front-month Brent crude prices were down 91 cents at $43.56 a barrel at 10:38 a.m. EDT (1538 GMT). U.S. crude futures traded down 54 cents at $40.20 a barrel, having touched a session low of $40.16.

Oil prices last week racked up their biggest weekly losses in eight months, pressured by swelling storage of crude on both land and sea.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza