Oil prices rose in Asian trade today as US President Barack Obama cleared the first legislative hurdle in his race to win congressional backing for military strikes on Syria.
New York’s main contract, West Texas Intermediate crude for delivery in October, gained 30 cents to $107.53 in mid-morning trade, while Brent North Sea crude for October gained 19 cents to $115.10.
The gains came after the US Senate Foreign Relations Committee backed an amended resolution authorising strikes in Syria, albeit with a 90-day deadline and barring the use of ground forces for combat purposes.
Obama met world leaders in Russia yesterday as he was striving to bridge deep divisions over his push for action triggered by an alleged chemical weapons attack on Damascus suburbs.
Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said the initial expression of support from Congress had increased the likelihood of military action.
This has raised concerns “that the unrest may spread in the Middle East region, which accounts for a third of the world’s crude, and disrupts oil supplies”, she said.
Chua Hak Bin, Southeast Asian economist at Bank of America Merrill Lynch in Singapore, said high oil prices could hurt economic growth.
“An oil price surge comes at a particularly bad time, when several Asian countries — particularly India and Indonesia — are already facing pressures from high inflation, large fuel subsidies, and widening oil-trade deficits,” he said in a note.