Brent Oil Hits 5-month High On Syria, Settles Lower On US Data
From Business Recorder
NEW YORK: Brent crude oil prices hit a five-month high above $111 a barrel on Monday as the United States signalled it was edging toward a possible military response to last week’s suspected chemical attack in Syria, but prices settled slighty lower in choppy trade as weak US economic data weighed.
In the most forceful US reaction yet since Wednesday’s suspected chemical attack, Secretary of State John Kerry accused the Syrian government of an attempted cover up and said President Barack Obama “believes there must be accountability for those who would use the world’s most heinous weapons against the world’s most vulnerable people.”
Oil analysts at Barclays said the growing likelihood of some form of US-led military response raised tensions in the Middle East “compounding concerns about the stability of the world’s key oil producing region and will likely exert upward pressure on prices.”
Brent crude oil futures for October delivery traded up to $111.68 a barrel, the highest since April 2, before slipping to end the day 31 cents lower at $110.73 a barrel.
After the settlement, prices edged up again to around $111.10 a barrel after the White House said it was “undeniable” that chemical weapons were used in Syria.
US crude for October delivery ended 50 cents lower at $105.92, after trading as high as $107.37, the most in four sessions.
Trading in both benchmark contracts was less than half the 30-day average, with a public holiday in London cutting volume.
Kerry spoke after a team of United Nations chemical weapons inspectors visited the site of the alleged poison gas attack in Syria, and as military chiefs from the United States and its European and Middle Eastern allies met in Jordan.
Unrest in the Middle East, which pumps a third of the world’s oil, has supported Brent crude. Hedge funds and other large speculators raised their bets on higher Brent prices to a record level in the week to Aug. 20, exchange data shows, while positioning for gains in US crude is also at elevated levels.
“The fear that the situation in the Middle East could spiral out of control is keeping sellers from coming out of woodwork,” said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.
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