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Crude oil futures fluctuate with Syria, U.S. supply data in focus

Published 08/27/2013, 03:54 AM
Updated 08/27/2013, 03:54 AM
Investing.com - Crude oil futures swung between small gains and losses on Tuesday, amid concerns that the U.S. could be growing closer to taking possible military action against Syria’s government.

Investors also looked ahead to the release of key U.S. weekly supply data to gauge the strength of oil demand from the world’s largest consumer.

On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD105.96 a barrel during European morning trade, little changed. The October contract settled down 0.5% at USD105.92 a barrel on Monday.

Nymex oil futures held in a range between USD105.90 a barrel, the session low and a daily high of USD106.59 a barrel.

Oil futures were likely to find support at USD104.32 a barrel, the low from August 23 and resistance at USD107.31 a barrel, the high from August 25.

Growing speculation that the U.S. and other Western nations will intervene in Syria continued to prop up oil prices in wake of allegations Bashar al-Assad’s government forces used chemical weaponry against civilians.

U.S. Secretary of State John Kerry said Monday that President Obama will hold Syria’s government accountable for using chemical weapons.

While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.

Market players are also concerned about the involvement of Iran, OPEC’s sixth-biggest oil producer.

Gains were limited as ongoing uncertainty over the timing of the Federal Reserve’s widely expected reduction in monthly bond purchases weighed on appetite for riskier assets.

The central bank is scheduled to meet September 17-18 to review the economy and assess policy.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of global equities.

Oil traders now looked ahead to the release of fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 0.1 million barrels.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery eased up 0.05% to trade at USD110.79 a barrel, with the spread between the Brent and crude contracts standing at USD4.83 a barrel.

Brent prices hit USD111.61 a barrel on Monday, the highest level since April 2.

London-traded Brent prices have been well-supported in recent sessions amid fears over a disruption to supplies from the Middle East and North Africa.

Countries in the Middle East and North Africa were responsible for 36% of global oil production and held 52% of proved reserves in 2012.

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