Crude Oil Hits 1-month Highs on US Missile Strikes in Syria
Friday, Crude Oil prices hit 1-month higsh after the United States fired missiles at a Syrian government airbase, sending shockwaves through global markets and raising concerns that the conflict could spread in the Oil-rich region.
The toughest US action yet in Syria’s 6-year-old civil war has ramped up geopolitical uncertainty in the Middle East.
Oil, Gold, foreign exchange, German and US 10-year T-bonds reacted strongly to the attack.
Brent Crude futures were up 0.68 at 55.57 bbl at 1012 GMT after reaching an intra-day high of 56.08, the highest since 7 March, shortly after the missile strike was announced.
WTI Crude Oil futures were up 0.70 at 52.40 bbl, having reached an intra-day high at 52.94.
June Gold rose 4.00 to 1257.20 oz,
Syria has limited Crude Oil production, its location and alliances with big Oil producers in the region mean any escalation of the conflict has the potential to increase supply-side fears.
As I see it the conflict in Syria has no bearing on Crude Oil fundamentals and that the political risk premium will likely fade, as quickly as appeared.
This might just be a speculative move higher because there’s nothing fundamental that’s supporting this rise.
Crude Oil markets are oversupplied, even with efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to cut supplies to prop up prices.
Russia, which is part of a deal between OPEC and non-OPEC Oil producers struck late last year to rein in supplies, said Friday it was too early to say whether a deal could be extended into 2-H of this year.
The world is awash in Crude Oil
|HeffX-LTN Analysis for USO:||Overall||Short||Intermediate||Long|
|Neutral (0.06)||Neutral (0.12)||Neutral (0.12)||Neutral (-0.06)|
|HeffX-LTN Analysis for OIL:||Overall||Short||Intermediate||Long|
|Neutral (-0.00)||Neutral (0.15)||Neutral (0.15)||Bearish (-0.31)|
|HeffX-LTN Analysis for GLD:||Overall||Short||Intermediate||Long|
|Neutral (0.16)||Neutral (0.23)||Neutral (0.19)||Neutral (0.06)|
Have a terrific weekend.
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