Oil prices rise amid Syria focus

11th September 2013, Comments 0 comments

World oil prices rose on Wednesday, despite news of falling US crude reserves, as the market focus remained on Syria, dealers said.

Brent North Sea crude for delivery in October rose 44 cents to stand at $111.69 a barrel in London late afternoon deals.

New York's main contract, West Texas Intermediate for October, added 38 cents to $107.77 per barrel.

"Oil prices are trading higher at the moment but by no means at a worrying level," said ETX Capital analyst Ishaq Siddiqi.

"For the market, the big concern over a Syria strike is of course the implications on the MidEast region and the impact on the global economy.

"An involvement of Iran and Israel ... would have sent shockwaves across markets as it threatens to engulf the whole region with oil supply likely to be disrupted."

Dealers also digested a smaller-than-expected drop in American crude reserves on Wednesday.

The US government's Energy Information Administration said that crude inventories slid by 219,000 barrels in the week ending September 6.

That was far lighter than market expectations for a 1.4-million-barrel decline, according to analysts polled by Dow Jones Newswires.

However, the market focus remains on Syria after US President Barack Obama asked Congress to delay voting on US military action overnight.

"After two days of sharp declines, oil prices are bouncing back a little," said CMC Markets analyst Michael Hewson.

"President Obama's announcement of a delay in a possible strike on Syrian military assets has taken some of the heat over the current rally in energy prices."

The oil market had plunged by more than two dollars on Tuesday, sliding for the second day in a row on easing fears of a possible US military strike on Syria.

In a live address to the nation from the White House, Obama said delaying a decision on military intervention in Syria was necessary to give a chance to Russia's plan to neutralise its ally's chemical weapons.

However he warned that it was too early to tell if Russia's plan would work, and said cruise missile destroyers would remain stationed in the Mediterranean, ready to strike.

"The ongoing Syrian conflict will remain a headline for the majority of the day as choppy, rangebound trading dominates market activity," noted Sucden brokerage analyst Kash Kamal.

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© 2013 AFP

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