Crude-oil futures accelerated toward a four-month high Friday as the U.S. government's decision to play an active role arming rebels in Syria raised concerns about tension in the oil-rich region.
Crude-oil futures accelerated toward a four-month high Friday as the
U.S.
government's decision to play an active role arming rebels in
Syria
raised concerns about tension in the oil-rich region.
Light, sweet crude for July delivery recently traded up $1.12, or 1.2%, higher
at $97.81 a barrel on the New York Mercantile Exchange, after rising to a
ten-month intraday high earlier in the session.
Brent crude on the ICE futures exchange for August delivery traded $1.27 higher
at $106.22 a barrel.
Prices jumped as traders grow concerned about the impact on crude supplies in
the
Middle East
after President Barack Obama authorized his
administration to arm rebels fighting President Bashar al-Assad in
Syria
. Analysts
said that this could prompt the involvement of other regional powers that are
key oil suppliers.
"One way or another the Syrian conflict is escalating," said Olivier
Jakob, analyst at Petromatrix. He said the conflict was not only morphing into
a "US-Russia proxy war but also into a US-Iran proxy war and nobody knows
how this will terminate."
Although
Syria
is
not a major oil producer, its proximity to significant oil exporters such as
Iran
,
Iraq
and
Saudi
Arabia
is weighing heavily on
investors' minds.
"
Syria
is
important for the stability of the entire
Middle East
,"
said Carsten Fritsch, oil analyst at Frankfurt-based Commerzbank.
Over the past week, the oil market's focus has swung from broader economic
concerns to the
Middle East
. Broader financial markets
have been weighed down by falling global growth forecasts, while oil traders
have reacted to grim oil-demand outlooks by the Organization of the Petroleum
Exporting Countries and the International Energy Agency.
But on Friday, political and military worries took center stage. In addition to
news regarding
Syria
,
Iran
's
presidential election also kept investors' attention. Voting began Friday, and
the results could help determine how the country approaches negotiations with
western nations regarding its nuclear program.
Other threats to supply have escalated in recent days as tensions rise between
Sudan
and
South
Sudan
over oil exports, and protests in
Libya
have
led to a fall in crude-oil production.
Meanwhile, lackluster economic data in the
U.S.
Friday did not generate much of a price reaction.
U.S.
industrial production remained unchanged, and the Thomson Reuters/University of
Michigan
consumer sentiment index, a gauge of Americans' view of the economy, fell to
82.7 in June from 84.5 in May.
Front-month July reformulated gasoline blendstock, or RBOB, recently traded
4.62 cents higher at $2.9073 a gallon. July ULSD heating oil recently traded
3.54 cents higher at $2.9749 a gallon.
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