Oil climbs as Turkey shoots down Russian jet
November 24 2015 09:05 PM


Global oil prices rose sharply on Tuesday after Turkey shot down a Russian jet on the Syria border, dealers said.

At about 1730 GMT, US benchmark West Texas Intermediate for delivery in January jumped $1.43 at $43.18 a barrel.

Brent North Sea crude for January rebounded $1.56 to $46.39 a barrel, compared with Monday's closing level.

"Commodities have bounced back with oil trading higher with rising geopolitical tensions in the Middle East," said CMC Markets analyst Jasper Lawler.

Russia confirmed that a warplane shot down by Turkey on the Syrian border was one of its fighter jets but insisted the plane had not violated Turkish airspace. 

The incident is the first time a Russian military plane has been downed since Moscow began a bombing campaign on September 30 at the request of its long-standing ally Syrian President Bashar al-Assad.

Moscow's intervention in Syria has strained its relations with Turkey -- a fierce opponent of Assad -- with Ankara summoning Russia's ambassador last week after Moscow's warplanes bombed Syrian territory "very close" to the Turkish border. 

"The latest escalation of the proxy war in Syria won't have much meaningful impact on oil supply or demand," Energy Aspects analyst Richard Mallinson told Bloomberg News.

"But with trading volumes thin before Thanksgiving, we have the conditions for a knee-jerk reaction to headlines, all the more so as physical oil markets show positive signs," he added.

Traders were awaiting a report on US commercial crude stockpiles for the week ending November 20. 

Expectations are that the data will show another increase, signalling weaker demand in the world's top oil consuming nation.

Analysts said comments from Saudi Arabian oil minister Ali al-Naimi, who said his country was prepared to work with other oil producers to stabilise prices, was muted because there was no firm signal to slash output to ease the global glut.

The market will be closely watching the gathering of the Organization of the Petroleum Exporting Countries (OPEC) next week for firm announcements on the cartel's lofty production levels, analysts added.

OPEC's decision in November 2014 to maintain high output despite falling prices accelerated a decline from peaks of more than $100 a barrel earlier in the year.

The cartel will meet at its headquarters in Vienna on December 4 for a regular production meeting.

World oil prices have more than halved in the past 18 months as global production outpaces consumption.

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