Oil price warning: Barrel price DROPS amid fall out from Syria bombing

Marco Green
April 17, 2018

Oil prices fell drastically and the bonds of the government rose in yields on Monday.

Usually in the aftermath of any market fear that proves to be a bust, experts look to the longer term for fresh worries, and Morgan Stanley did exactly that on Monday in the wake of the US missile strikes against Syria being pulled off with far greater success and precision than critics had expected.

The strikes of Saturday marked the biggest intervention by Western countries against the president Syria, Bashar Al-Assad and his ally Russian Federation, who is to face further economic sanctions over its role in the conflict. US President Donald Trump has threatened to withdraw the United States from the pact, barring action from Congress and Europe.

"US shale producers have been quietly capitalising on higher oil prices with increasing rig counts seen".

USA crude fell 1.34 percent to $66.49 per barrel.

Harry Tchilinguirian, BNP Paribas global head of commodity market strategy said: "As far as developments in Syria are concerned, the market has had a sigh of relief in the sense that there is no escalation, either diplomatically, or on the ground, following the intervention by the U.S., France and the UK".

Missile strikes against Syria, inflicted on April 14 by the U.S., France and Britain, did not impress the market, although hypothetically this factor should contribute to the revival of the demand for black gold, since conflicts in the Middle East usually have an impressive influence on the mood in the raw material segment due to the volumes produced and exported in this region of oil.

Fund managers hold more Brent futures and options than at any time since records began in 2011, according to data from the InterContinental Exchange.

Brent crude oil futures were at $71.69 a barrel at 3.26am GMT, up 27c, or 0.4%, from their last close.

Aside from a flurry of profit-taking after the air strikes, oil also came under some pressure from another rise in US drilling activity.

"That's a price that I don't think is hurting USA consumers too much", Kelly said, adding that $70 oil is a price that's actually helping the stock market and US energy companies. This total is highest since March 2015 said Baker Hughes on Friday.

Other reports by Click Lancashire

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