U.S. crude gained as much as 1.7 percent in New York, wiping out an earlier decline of 0.2 percent. Brent, the global benchmark, jumped 1.6 percent in London. The strike early Friday morning in Syria targeted hangars, planes and fuel tanks at one Syrian military airfield, according to a U.S. official. Financial markets from stocks to currencies seesawed on the news.
“Syria is not a big oil producer but it does potentially increase the risk of escalation in the whole region,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “We’re seeing a risk response to the airstrike. Given rising supply, the size of inventories and the extent of the pick up in shale output, it does seem likely that price gains will be capped.”
The strike against Syria comes two days after Bashar al-Assad’s regime used poison gas to kill scores of civilians, drawing international condemnation while U.S. President Donald Trump called it “an affront to humanity.” Oil has struggled to extend a rally beyond $51 a barrel in the past week as concerns over record U.S. inventories and rising American production countered optimism OPEC’s production cuts will ease a global glut.
West Texas Intermediate for May delivery gained as much as 87 cents to $52.57 a barrel on the New York Mercantile Exchange, and traded at $52.54 by 9:48 a.m. in Hong Kong. Total volume traded was more than double the 100-day average. The contract gained 55 cents to $51.70 on Thursday.
Brent for June settlement rose as much as 86 cents to $55.75 a barrel on the London-based ICE Futures Europe exchange. The contract rose 53 cents to $54.89 on Thursday. Prices are up 2.7 this week, set for a second weekly advance. The global benchmark crude traded at a premium of $2.77 to June WTI.