Brent Expected To Skyrocket If Military Attacks Are Carried Out
Brent crude oil backed off a bit on Thursday as delays in the Obama administration's planned military strikes on Syria became more likely. The commodity traded at $115.10 at 7:45 GMT on Thursday morning.
Concern about oil supplies coming from the Middle East has driven Brent prices since US officials announced that they believed Syrian President Bashar al-Assad's involvement in chemical weapons strikes against civilians was “undeniable”. Now, the US is working out multi-national strikes against the Syrian President's forces.
Although Syria is not a major oil exporter, investors are worried that more violence in the already war torn country could disrupt the already fragile state of its Middle Eastern neighbors. Reuters reported that the French bank Societe Generale sees Brent prices rising as high as $150 if violence in Syria spreads to major producers like Iraq or Iran. The bank also advised that the commodity could climb to $125 in the coming days just on the possibility of an attack.
The situation in Syria developed only days after Libya was forced to shut down several of its major export terminals over labor issues. Although Libya has been able to reopen some if its smaller ports, the country's oil output has fallen to 250,000 barrels per day, less than half of its normal capacity.
Oil prices were supported even more from US data which showed that although the nation's crude stocks rose by 3 million barrels, they were 2.5 million barrels below last year's level. The data also showed that stocks in Cushing, Oklahoma, a key storage hub, fell for the eighth consecutive week.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.