Oil markets tense after western strikes on Syria, rising US drilling weighs

Oil priceOil fell more than 1 percent on Monday as markets opened following western air strikes in Syria over the weekend, while a rise in US drilling for new production also dragged on prices. The United States, France and Britain launched 105 missiles on Saturday, targeting what they said were three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma on April 7.
Brent crude oil futures were at $71.78 per barrel at 0643 GMT, down 80 cents, or 1.10 percent, from their last close. US West Texas Intermediate (WTI) crude futures were down 68 cents, or 1.01 percent, at $66.71 a barrel. Traders said markets in Asia began cautiously after the weekend strikes, with some relief that the move looked unlikely to escalate.
“In the wake of the coordinated attack on Syria, oil prices are significantly lower … (but) the impact appears to be compact and over,” said Sukrit Vijayakar, director of energy consultancy Trifecta. Oil markets also came under pressure from a rise in US oil drilling activity.
US energy companies added seven oil rigs drilling for new production in the week to April 13, bringing the total to 815, the highest since March 2015, energy services firm Baker Hughes said on Friday. Despite this, Brent is still up more than 16 percent from its 2018 low in February, due to healthy demand and also because of conflict and tension in the Middle East. Although Syria itself is not a significant oil producer, the wider Middle East is the world’s most important crude exporter and tension in the region tends to put oil markets on edge. “Investors continued to worry about the impact of a wider conflict in the Middle East,” ANZ bank said.
Sources and photo-credits: Gulf Times