LONDON (Reuters) - Oil rose to over $91 a barrel on Tuesday after Turkish troops crossed over into Kurdish territory in northern Iraq.
Three hundred Turkish troops crossed the border overnight to combat Kurdish militants sheltering in the semi-autonomous region and blamed for attacks on Turkish territory.
U.S. light crude for January delivery, which expires later on Tuesday, rose 81 cents to $91.44 a barrel by 10:21 a.m., recouping some of the losses after falling for three straight sessions.
London Brent crude was up 55 cents at $91.84.
Analysts said rising geopolitical concerns centred on the oil-producing Mideast had put fundamental factors such as tight fuel stocks during an intensifying winter season into sharper focus.
“The lower your spare capacity, geopolitical sensitivity is exacerbated. If something more dramatic happens, given the seasonal stuff... I’m more than confident we could revert higher,” said Harry Tchlinguirian at BNP Paribas.
Worries about supplies as the Northern Hemisphere headed into winter helped send U.S. crude to near $100 a barrel in late November. But reverse concerns of a possible glut should there be a recession in top energy market the United States have pulled prices back to $90.
Signs that the U.S. economy may be weakening are multiplying and prompting increased warnings that a recession may be around the corner.
In the shorter term oil prices could rebound later this week if weekly stocks data show a fall in crude and distillates stocks, as forecast by analysts.
U.S. crude oil inventories likely fell for the fifth week in a row last week as fog hit import deliveries at the Houston Ship Channel, a preliminary Reuters poll of industry analysts showed on Monday.
Distillate stocks, that include heating oil and diesel, were forecast to have fallen for the second consecutive week, while gasoline supplies probably rose for the sixth straight week, the survey showed.
On average, crude stocks were expected to have fallen 1.4 million barrels while distillate stocks likely declined 600,000 barrels, analysts said.
(Additional reporting by Maryelle Demongeot in Singapore)
Reporting by Santosh Menon; Editing by William Hardy