* Escalating Turkey-Syria conflict poses supply risk
* Saudi oil minister wants to see Brent fall towards $100
* IMF cuts global growth forecast
* Iraq’s oil exports up, output may double by 2020
By Peg Mackey
LONDON, Oct 9 (Reuters) – Oil rose to around $113 a barrel
on Tuesday after two days of losses, with tensions in the Middle
East and the risk of supply disruptions outweighing concerns
about sluggish global demand.
Turkish President Abdullah Gul said on Monday the
“worst-case scenarios” between his country and Syria were now
playing out, fuelling concerns that the 18-month-old conflict in
Syria may spread to other countries in the region.
“It’s a political risk premium coming into the market now,
not really supported by fundamental data,” said Andy Sommer, oil
market analyst with EGL in Switzerland.
“If you look at the demand side, prices should be a bit
lower than they are currently. But the risk, or fear, that this
Turkey-Syria conflict might spread further in the Arab world is
increasing that risk premium.”
Brent futures rose $1.23 to $113.05 by 1314 GMT.
U.S. crude climbed 94 cents to $90.27, also rebounding
after two consecutive sessions of declines.
Tensions between Syria and Turkey are at their worst since
March after cross-border firing accidentally killed some Turkish
civilians last week, causing Istanbul to boost its military
presence along the border.
This could threaten oil production in the north of Iraq and
its transport to the West, analysts said.
Concerns over Syria have eclipsed Iran’s long-running row
with the West over Tehran’s disputed nuclear programme that has
led to sanctions on Iranian oil shipments.
OPEC’s biggest producer, Saudi Arabia, has raised output to
a 30-year high of 10 million barrels per day (bpd) – helping to
compensate for the cut in exports from Iran.
And Oil Minister Ali al-Naimi said on Tuesday Saudi Arabia
would continue to pump at around that rate this month. The
veteran oil minister said oil prices were still too high and
Riyadh would like it to fall towards $100.
More supply is also on the way from neighbouring Iraq,
OPEC’s second-biggest producer after Saudi. Exports this month
are expected to rise above 2.8 million bpd, the highest in
decades, and output is on course to more than double by 2020.
IMF CUTS FORECAST
A poor outlook for the global economy is keeping a lid on
oil price gains.
The International Monetary Fund cut its global growth
forecast for the second time since April and warned U.S. and
European policymakers that failure to fix their economic ills
would prolong the slump.
For 2012, the IMF now expects global output to grow just 3.3
percent, down from its July estimate of 3.5 percent, making it
the slowest year of growth since 2009.
It predicted only a modest pickup next year to 3.6 percent,
below its July estimate of 3.9 percent.
Growth in China’s economy, the world’s second-biggest, will
slow to 7.8 percent this year from 9.2 percent in 2011, the IMF
said, warning of risks to emerging Asia if the euro zone crisis
worsens and the United States does not avoid its “fiscal cliff”.
