London (AFP) – Oil prices rallied on Friday after the United States launched a missile strike against Syria, sparking fears that an escalation of the conflict in the crude-rich Middle East could disrupt supplies.
Both main contracts jumped more than two percent to their highest levels in a month after US President Donald Trump ordered an assault in retaliation for a chemical attack in Syria that Washington blamed on Damascus.
After benchmark contract Brent struck $56.08 per barrel and WTI $52.94, gains were pared through the day.
By 1100 GMT, Brent North Sea crude for delivery in June was up 35 cents at $55.29 per barrel compared with Thursday’s close.
The US benchmark West Texas Intermediate for May won 48 cents at $52.18.
“Among the most pressing questions will be: is this a one-off attack and are other nations going to join in? What will be the response of Iran and Russia — two of the world’s largest oil producers and staunch allies of the Assad regime?”
Sukrit Vijayakar of Trifecta Consultants said the crude oil market is likely to hold on to gains over the next few months.
While Syria is not a major oil producer, it borders Iraq, OPEC’s second-largest crude producer.
Oil prices have struggled to hold above $51 a barrel owing to concerns about an OPEC-led output cut put in place in January as part of a drive to address a global supply glut and overproduction.
There are worries also that prices above $50 will encourage US shale producers to ramp up production as it becomes more cost-effective.
A world supply glut of crude hammered prices from highs of more than $100 per barrel in June 2014 to near 13-year lows below $30 in February 2016.