Global oil prices surged
higher Tuesday after Turkey shot down a Russian warplane on the Syrian border,
sparking concerns about rising in the oil-rich Middle East.
US benchmark West Texas Intermediate for
January delivery gained $1.12 to $42.87 a barrel on the New York Mercantile
Exchange.
European benchmark Brent oil for January
delivery advanced $1.29 to $46.12 a barrel in London.
The Turkish army said the plane was shot
down by two Turkish F-16s after it had violated Turkish airspace 10 times
within a five-minute period. Russia insisted the plane was inside Syrian
airspace, raising the possibility of a major spike in tensions over Syria.
"We're really getting a boost here
from geopolitical tensions, as concerns have been stoked by news a Russian
plane has been shot down, and fears that an escalation could cause some kind of
contagion in the Middle East and ultimately affect oil supplies," said
Matt Smith, an oil analyst at ClipperData.
Still, market analysts noted that Syria
produces almost no oil and that there was a good chance that the uptick in
tensions over the incident could abate before long. As a result, some viewed
Tuesday's jump in oil prices as evidence of profit taking.
The market is looking ahead to
Wednesday's weekly US oil inventory report. Analysts said the impending
Thanksgiving holiday in the US on Thursday could mute reaction to the
government report, although there also was the chance of greater volatility due
to low trading volume.
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