Crude oil prices drift lower at the start of trading Monday after Japan reports its economy is shrinking and moving back into recession. Photo by Keizo Mori/UPI |
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NEW YORK, Nov. 16 (UPI) -- Energy markets shook off concerns about last week's Islamic State attacks on Paris to drift lower on word the Japanese economy moved back into recession.
Crude oil prices moved higher in the wake of last week's tragedy in Paris, which sparked increased military activity from members of a U.S.-backed coalition against Islamic State targets, largely inside Syria. Increased conflict could spill over into the broader Middle East region and threaten key choke points for crude oil transit and production, including in the northern Iraqi border region near Syria.
Oil prices in late September moved higher when Russia announced it was building military support on the side of its ally and Syrian President Bashar Assad.
Macroeconomic news influenced crude oil prices in early Monday trading, however. Brent crude oil was off about 0.4 percent in early morning trading to $44.31 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was relatively unchanged at $40.78.
Crude oil prices are down more than 40 percent from this time last week because global economic growth, a metric for demand, is not enough to take up the glut of oil on the market.
Japan reported gross domestic product shrank at an annualized rate of 0.8 percent for the two-month period ending in September. That follows a second quarter contraction of about 0.7 percent, formally pushing Japan, the world's third-largest economy, into recession for the second time in two years.
Concerns about the pace of economic growth in Asia have put downward pressure on crude oil prices during the early stages of the second half of 2014.
In September, Japanese Prime Minister Shinzo Abe said he'd work to expand the economy by about 20 percent to around $5 trillion, adding economic strength was a central focus of his administration.
