Oil prices seen under pressure as Paris attacks spark demand worries

Sun Nov 15, 2015 10:20am EST
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By Ron Bousso and Libby George

LONDON (Reuters) - Prices of oil and other commodities will come under renewed pressure on Monday on fears that Friday night's deadly attacks on Paris will further slow the global economy. 

Oil is already trading near its six-year lows and healthy demand has been a major factor preventing the prices from sliding any lower amid a worsening global oil glut due to abundant supplies.

At least 129 people were killed on Friday evening in a series of coordinated attacks on Paris with Islamist militants claiming responsibility for the carnage.

"Currently sentiment is really bearish, so this could be seen as hurting demand, so oil prices could fall further," said Amrita Sen from Energy Aspects.

Sen added that a short-term sell-off could, however, be followed in the mid-term by a rally if people think events in Paris could lead to a serious escalation of tensions in the Middle East.

Analysts from Eurasia Group said the attacks will likely undermine the French government's ability to focus attention on the improving economy.

Looking at the broader financial repercussions, global stocks are set for a short-term sell-off on Monday but few strategists expect a prolonged economic impact or change in prevailing market directions.

ActivTrades chief analyst Carlo Alberto de Casa and Ed Meir, analyst at INTL FCStone, both said they expect a moderate rebound in gold prices given that equities and commodities were poised to be hit.   Continued...

The prices at a Valero Energy Corp gas station are pictured in Pasadena, California October 27, 2015.  REUTERS/Mario Anzuoni