Oil Prices Move Up On Global Crisis

Oil prices surprised analysts by inching up Tuesday on concerns about continued global tensions.

The black gold hit two-week highs, with Brent futures rising 2.9 percent to settle at $46.12 a barrel and U.S. crude gaining 2.7 percent to settle at $42.87 following reports of a downed Russian warplane near the Syrian border by Turkey.

U.S. stocks ended slightly higher as energy shares rose with oil prices and the S&P energy index ended up 2.2 percent.

Travel stocks fell, however, after the U.S. State Department late on Monday warned U.S. citizens to refrain from traveling abroad due to risks posed by increased terrorist threats.

The incident was the first time a NATO member’s armed forces shot down a Russian or Soviet military aircraft since the 1950’s. Russia has yet to respond but many investors fear further escalation between Turkey and Russia.

Russia is one of world’s largest oil producers and according to analysts, the current encounter with Turkey contributes significantly to the premium on oil. In addition, the second largest oil producer, Saudi Arabia, has hinted that it may finally be ready to cut oil production at the OPEC meeting next week.

Despite Tuesday’s gains, oil prices are still around six-year lows even as demand continues to rise.

Dow Up

The Dow Jones industrial average (DIA) rose 19.51 points, or 0.11 percent, to 17,812.19, the S&P 500 (SPY) gained 2.55 points, or 0.12 percent, to 2,089.14 and the Nasdaq Composite (QQQ) added 0.33 points, or 0.01 percent, to 5,102.81.

The MSCI index of global stock markets was down 0.1 percent, well off the day’s lows, while a broad gauge of European stocks dropped 1.3 percent.