Business

Oil rises on Syria turmoil

Friday, October 12, 2012    

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LONDON, England — Global oil prices climbed yesterday on the back of geopolitical jitters surrounding Syria, while traders also digested buoyant US economic data.

Brent North Sea crude for delivery in November soared to US$116 per barrel, the highest level since September 17, lifted also by supply delays after regular maintenance in the North Sea, dealers said.

The Brent oil price later stood at US$115.07, up 74 cents from Wednesday's closing level. Elsewhere, New York's main contract, light sweet crude for November, added 67 cents to US$91.92 a barrel.

"Brent is continuing to profit from the geopolitical tensions in the Middle East and from the delays in the resumption of North Sea production," said Commerzbank analyst Carsten Fritsch.

Crude oil prices also hit three-week peaks on Wednesday thanks to supply concerns linked to simmering tensions in the crude-rich Middle East, but the market had finished the day in the red on global demand worries.

Geopolitics moved back into focus yesterday as Damascus accused Ankara of "hostile" behaviour over a Syrian Air plane after it was intercepted by Turkish authorities en route from Moscow to Damascus and forced to land in Turkey.

The interception of the plane on Wednesday was "hostile and reprehensible behaviour" and "another sign of the hostile policies of the Erdogan government, which harbours (rebels) and bombs Syrian territory," the foreign ministry said, referring to Turkish Prime Minister Recep Tayyip Erdogan.

The ministry also demanded that Turkey return cargo seized from the Syrian Air jet.

Oil had already rallied by about US$3 on Tuesday on heightened concerns that the Syrian conflict could spread to Turkey after border skirmishes over the past week.

However, market sentiment was dampened by a raft of economic growth forecast downgrades this week from the International Monetary Fund, the World Bank and the Asian Development Bank.

Meanwhile on Friday, prices pared some of their gains in afternoon trade after the US Department of Energy posted a bigger-than-expected increase in American crude stockpiles amid weak demand and strong production.

The DoE said that crude inventories surged by 1.7 million barrels in the week ending October 5. That was almost triple market expectations for a gain of 600,000 barrels, according to analysts polled by Dow Jones Newswires.

The report was being published one day later than usual owing to a US Columbus Day holiday last Monday.

—AFP

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