The escalating likelihood that a Middle-Eastern nation will endure a Western military attack helped drive West Texas Intermediate crude oil futures to their top value in about 27 months on Wednesday, according to Bloomberg.
For its suspected use of chemical weaponry on its own citizenry last week, Syria is in the crosshairs of a U.S.-led coalition, The Washington Post reports.
After having checked in at no more than $95 per barrel in late June, the energy commodity has been steadily climbing this week as concerns grow about supply disruptions from the oil-rich Middle East once the coordinated attack is unleashed on the regime of president Bashar al-Assad of Syria.
In addition to prompting worries about supply disruptions, the debacle over Syria also poses the risk of spreading violence and strife.
"The increasing likelihood of some form of limited US led military action in Syria is compounding concerns about the stability of the world's key oil producing region and will likely exert upward pressure on prices until the nature of the possible military intervention becomes apparent," states a Tuesday client note authored by Barclay oil analysts, according to The Washington Post. "But the bigger risk for the oil market is the potential for the Syrian conflict to spread to neighboring producing countries and imperil regional output."
At 9:36 a.m. on Wednesday, WTI crude oil futures rose 0.72 percent, a 79-cent gain to $109.80 per barrel. Brent crude oil futures increased 1.01 percent, a $1.16 lift to $115.52 per barrel.
U.S., France, Britain prepare to act
The coalition of military forces driving toward responding with force against Syria includes the U.S., France and Great Britain, according to Bloomberg. They were in the process of establishing a legal basis to legitimate what is believed to be an imminent attack.
Societe Generale SA forecast Brent crude oil futures to rise as high as $150 per barrel in the aftermath of the concerted attack.
Libyan production might have slumped lower than 200,000 barrels per day, which would be the slimmest production since demonstrations against president Muammar Ghadafi, who was killed in October 2011.
"The geopolitical risk in Syria continues to dominate the market," analyst and commodities broker Myrto Sokou with Sucden Financial Ltd. in London told Bloomberg on Wednesday. "We expect the recent upside rally in the oil market to continue."
Crude oil futures and U.S. equities are performing the inverse of one another on Wednesday, spurred by threats of violence escalating in the Middle East.
Japanese supplies slide
Reuters reports supplies of the energy commodity in the globe's third-largest economy last week dropped to their lowest amount in nearly three years, according to industrial data released on Wednesday.
Japan is in peril of being ousted from its position as the globe's third-largest consumer of the energy commodity. Demand and consumption of crude oil has steadily fallen in the Pacific Rim nation.
During the first half of this year, India displaced Japan as the number three user of crude oil. Thus Japan fell to No. 4 as the remainder of the year hangs in the balance.
Supplies of crude oil were at 85.79 million barrels for week ended August 24, according to the Petroleum Association of Japan. That marks the lowest it has been since the end of September 2010.
One likely prompt said last week's slippage is linked with the Cosmo Oil Company shuttering a refinery that generated 140,000 barrels per day. The Sakaide site was in Western Japan.
"Low levels like this look to become the new normal in Japan as refiners shut units and thus carry less crude oil," independent oil economist Osamu Fujisawa in Japan told Reuters on Wednesday.
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