Oil prices slipped today as oil markets calmed, following last week’s increase due to global economic concerns and supply worries, balancing fears of fresh conflict in the Middle East after the Algerian crisis.

Brent dropped by 32 cents to $111.57 per barrel, while US crude slipped by 46 cents to $95.10 per barrel, reported Reuters.

The International Energy Agency (IEA) said that markets were more rigid than expected but that it was too early to announce a return to the bull market.

The agency also cautioned that a revival in demand in China and a production cut announced in Saudi Arabia may constrict the market.

The US Energy Information Administration (EIA) expressed its hope at the beginning of January that US crude production would increase by the largest amount on record in 2013.

Prices came under pressure today after consumer sentiment in the US plunged to the lowest in a year this January, mainly due to the concerns surrounding the country’s debt crisis.

Last week, the Organization of the Petroleum Exporting Countries (OPEC) published a report that showed oil supplies will surpass demands in the first half of 2013, even after Saudi Arabia reduces its production by the end of the year.

Prices received some support due to fresh conflict in the Middle East, which resulted in about 80 people, including both western hostages and militants, being killed in a hostage crisis on an Algerian gas field.

About 30 foreigners, including nationals from US, UK, France, Japan, Norway and Romania, are among those either missing or confirmed dead after Algerian forces stormed the facility to free the hostages.

As an immediate response towards the Algerian incident, Libya increased security at all its oil fields, while energy companies are also considering beefing up security at their facilities in Egypt, after Islamist militants threatened to attack new installations in North Africa.

Image: In the beginning of January, the EIA said that it expects US crude production to increase by the largest amount on record in 2013. Photo courtesy of Lars Christopher Nøttaasen.