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Oil rose to fresh multi-month highs in Asian trade today as Western powers prepared for possible military action against Syria over the regime’s alleged use of chemical weapons.
Analysts say a military strike targeting President Bashar al-Assad’s regime could further ratchet up tensions in the oil-producing West Asia, already wracked by the festering political crisis in Egypt.
New York’s main contract, West Texas Intermediate (WTI) for delivery in October, was up $1.26 to $110.27 a barrel in mid-morning trade after reaching its highest level in 18 months in US trade yesterday.
Brent North Sea crude for October added $1.54 to $115.90, after hitting its highest price in six months the day before.
“The potential for military action (against Syria) in a matter of days or weeks has helped to lift oil prices,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
French President Francois Hollande had said on Tuesday that “France is ready to punish those who took the vile decision to gas innocent people”, adding that he had decided to increase France’s military support to Syrian rebels.
US Defence Secretary Chuck Hagel had yesterday underlined preparations for possible military strikes against Syria.
“The risks of oil remain, in terms of the potential for disruption of trade and shipping routes in the region,” said McCarthy.
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