By Karolin Schaps
LONDON (Reuters) – Oil prices rose on Tuesday as tensions in the oil-rich Middle East escalated following the downing of a Russian-made fighter jet near the Syrian-Turkish border & a weaker U.S. dollar provided incentive for investors to buy more oil.
Brent futures for January were up 67 cents to $45.50 a barrel at 0909 GMT, up 1.5 percent on Monday's close. West Texas Intermediate (WTI) crude was up 68 cents at $42.43.
"News of a military jet crashing in Syria is a reminder that there is still substantial risk in the Middle East," said Bjarne Schieldrop, the Olso-based chief commodities analyst at SEB.
Turkey said it had downed a Russian-made fighter jet near the Syrian border after it violated Ankara's airspace.
A weaker U.S. dollar, easing from an eight-month peak against a basket of currencies, moreover lent support as investors found it cheaper to buy the dollar-denominated commodity.
They moreover awaited U.S. crude stocks data, with expectations of a small increase.
U.S. commercial crude oil stocks likely gained 1.1 million barrels for the week ended Nov. 20, according to a preliminary Reuters survey of five analysts on Monday. A rise would mark a ninth consecutive weekly gain.
"We still think that a low 40s NYMEX WTI is a floor from which the market can rally through the winter," said BNP Paribas said in a research note.
"Thereafter, the summer of 2016 presents down risk for oil prices as OPEC pursues its current policy, U.S. production stabilises & Iran delivers more barrels to the market."
Saudi Arabia led a shift by the Organization of the Petroleum Exporting Countries (OPEC) in November 2014 to defend market share against competing supplies, rather than cut output to prop up prices.
The Saudi cabinet said on Monday it was ready to cooperate with OPEC & non-OPEC countries to achieve market stability, days before OPEC meets to review its policy.
(Additional reporting by Meeyoung Cho in Seoul; editing by Jason Neely)