Oil prices rise as tension escalates in Middle East

Oil prices in global markets have risen over increasing tensions in the oil-rich Middle East after Turkish warplanes downed a Russian jet over the Syrian border.

According to market dealers on Tuesday, price of every barrel of US benchmark West Texas Intermediate for delivery in January gained 38 cents to be sold at $42.13.

Meanwhile, price of Brent North Sea crude for delivery in January rose 68 cents to reach $45.51 a barrel, compared with Monday's closing level, AFP reported.

"Commodities have bounced back with oil trading higher with rising geopolitical tensions in the Middle East," said CMC Markets analyst, Jasper Lawler.

Earlier on Tuesday, Moscow confirmed that a Russian warplane was shot down by Turkey’s jets on the Syrian border, insisting that the plane had not violated Turkish airspace, as claimed by officials in Ankara.

The incident is the first time that a Russian military plane has been downed since Moscow began its airstrikes on September 30 against the positions of foreign-backed terrorist groups that are fighting to topple the government of Syrian President Bashar al-Assad.

Moscow's military action in Syria has already strained its relations with Ankara, which is a staunch opponent of Syrian president. Turkish government summoned Russia's ambassador last week, claiming that Moscow's warplanes bombed Syrian territory "very close" to the Turkish border.

"The latest escalation of the … war in Syria won't have much meaningful impact on oil supply or demand," Energy Aspects analyst, Richard Mallinson, told Bloomberg News, adding, "But with trading volumes thin before Thanksgiving [Day], we have the conditions for a knee-jerk reaction to headlines, all the more so as physical oil markets show positive signs."

On Tuesday, traders were also awaiting a report on US commercial crude stockpiles for the week ending November 20, expecting that the data will show another increase, signaling weaker demand in the world's top oil consuming nation.

Analysts also noted that the answer to recent remarks by Saudi Arabia’s Oil Minister Ali al-Naimi, who said his country was prepared to work with other oil producers to stabilize prices, has been muted, because there was no firm signal that the kingdom was planning to slash output to ease the global oil glut.

Market analysts have also noted that the global market will be closely watching the gathering of the Organization of the Petroleum Exporting Countries (OPEC) next week for firm announcements on the organization’s high production levels.

OPEC's decision in November 2014 to maintain high output despite falling prices accelerated a decline in oil price from peaks of more than $100 a barrel earlier in the year.

The international body will meet at its headquarters in Vienna on December 4 for a regular production meeting.

World oil prices have more than halved in the past 18 months as global production outpaces consumption.