Crude oil price up 5pc as US strike in Syria fuels supply fears

THE US missile strike against Syria pushed oil prices to a four-week high as global markets reacted to heightened geopolitical tension in the region.

The price of benchmark Brent crude oil settled up 4pc higher than at the start of the week, at $55.24 a barrel, after four consecutive days of rising prices and a surge yesterday following the US decision to take military action against the Assad regime.

Shakil Begg, head of oil research at Thomson Reuters, said it was clear military tensions in the Middle East had ratcheted up prices but warned that the market may be turning a blind eye to factors that could drive them lower.

“Crude oil rallied on Friday as news that the US launched air strikes against a Syrian airbase overnight raised con- cerns the conflict in Syria could spill over to affect key oil producers in the Middle East,” he said.

“Syria itself has negligible oil production but neighbouring Iraq, and nearby Iran and Saudi Arabia, are key oil suppliers to the global market.”

US crude supplies are continuing to grow as higher prices encourage more shale producers. Analysts have warned that the resurgence of US shale could undermine supply cuts agreed last year between members of Opec and those outside the cartel.

However, Mr Begg said: “Speculation that global crude supply is tightening has led to firmer prices this week, but Thomson Reuters oil research indicates actual crude shipments from Opec remain steady with exports for both February and March near levels since last November.”