The price of New York’s main oil benchmark hit a nine-month peak overnight as traders worried that the Syria crisis could hit supplies from the crude-rich Middle East.Syria is expected to top the agenda at the Group of Eight (G8) meeting of world leaders taking place in Northern Ireland. New York’s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in August, reached $US98.74 per barrel, a level last seen in September 2012.
At the same time, Brent North Sea crude for August climbed to $US106.67 a barrel, the highest point since early April. “Fears that Western intervention in Syria could increase the risks of a broader Middle East conflict have already put some upward pressure on the price of Brent crude,” Capital Economics analyst Julian Jessop said. “However, even if tensions do continue to rise – which all the major players would want to avoid – we would expect any fallout for global oil markets to be more than offset by the prospect of releases from the vast strategic reserves held by the US and its allies.”
Alpari analyst Joshua Mahony added that Syria was “not a major oil-producing country, yet the potential for spillages into neighbouring countries has spooked the markets somewhat”.Prices had also advanced on Friday after US officials said they had evidence of the use of chemical weapons by forces backing Syrian leader Bashar al-Assad and signalled that Washington could begin arming the opposition. “The decision of the US to supply arms to the rebels in Syria threatens finally to turn the civil war in Syria into a proxy war between the world powers, given that Russia is providing military support to the Assad regime,” Commerzbank analyst Carsten Fritsch said.
US president Barack Obama and world leaders have arrived in Northern Ireland looking to put pressure on Russia to back away from its support of Mr Assad. British prime minister David Cameron says his priority for the meeting is to ensure a peace conference on the Syria conflict takes place later this year. But amid rising tensions over Syria, talks between Mr Obama and Russian president Vladimir Putin were set to be prickly, with both leaders offering military support to opposing sides in the war