MARKET WATCH: Oil prices climb pending US, UK decisions on Syria

Crude oil prices settled at a 2-year high Aug. 28 on the New York futures market and also climbed on the London market, driven by continuing concerns that a potential military strike in Syria could disrupt world oil supplies coming from the Middle East.

Syria is not a major oil exporter, but traders and analysts suggest an escalating civil war in Syria could result in a wider regional conflict. Officials in Syria and Iran have warned regional chaos would result if the US follows through on its talk to launch military airstrikes on Syria.

The latest comments from the White House seem to indicate a short-term timetable for a possible intervention could face delays. Previously, US officials had talked of a strike “in coming days.”

But US President Barack Obama told PBS that he has yet to decide whether to launch a strike against the Syrian government for using a deadly chemical weapons on civilians on Aug. 21.

The administration believes Obama has authority to make the decision without approval from Congress. In 2011, some lawmakers criticized Obama for deciding to join a military mission in Libya without congressional approval.

British Prime Minister David Cameron faces opposition from politicians and others regarding a UK commitment to military action in Syria. Cameron was expected to present his case for military action to the British parliament Aug. 29.

Energy prices rise

In trading on New York and London markets on Aug. 28, prices moved up across the energy complex.

The October contract for benchmark US light, sweet crudes on the New York Mercantile Exchange rose $1.09, closing at $110.10/bbl on Aug. 28, which was crude’s highest settlement since May 3, 2011. The November crude contract climbed $1.07 to $109.37/bbl.

Heating oil for October delivery increased 4.6¢ to settle at $3.21/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for September rose 6¢ to $3.09/gal.

The September natural gas contract was up by 3.3¢ to close at $3.567/MMbtu on NYMEX. On the US spot market, gas prices at Henry Hub, La., increased by 5¢ to a rounded $3.56/MMbtu.

In London, the October IPE contract for North Sea Brent crude climbed $2.25 to $116.61/bbl, marking its highest settlement since Feb. 19. The September contract for gas oil settled at $970/tonne, up $8.25 from the previous session.

The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes shot up $2.97 closing at $112.25/bbl on Aug. 28.

Contact Paula Dittrick at paulad@ogjonline.com.

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