Tags: oil | price | Obama | Syria

Oil Prices Climb as Obama Wins Key Support for Syria Strike

Tuesday, 03 Sep 2013 04:20 PM

 

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Oil prices rallied Tuesday after U.S. President Barack Obama received support from key opposition Republican lawmakers for military strikes against Syria for its alleged chemical weapons attack on civilians.

Buying also found support from a surprisingly strong report on growth in the US manufacturing sector that boosted hopes for improved energy demand in the world's biggest economy.

New York's main contract, West Texas Intermediate (WTI) for October delivery, rose 91 cents to close at $108.54 per barrel.

Brent North Sea crude oil for October delivery climbed to $115.68 per barrel, up $1.45 from Monday's closing level.

Obama received Tuesday the support of two Republican leaders of the House of Representatives – House Speaker John Boehner and House Majority Leader Eric Cantor – for the strikes against Syrian President Bashar al-Assad's government in response to its alleged Aug. 21 deadly gas attacks against civilians.

Over the weekend the U.S. president said he would seek authorization from Congress for any intervention, after signaling last week a punitive action could be imminent.

Though the strong support from Republican leaders did not mean that Congress would give Obama a green light on the planned attacks, it substantially increased the odds of a yes vote, likely as soon as next week after Congress returns from summer recess Monday.

"He's (Boehner) signed on to the president's action plan, putting their political differences aside, which increases the probability of a conflict in the Middle East," said Bart Melek, commodity strategist at TD Securities.

A key U.S. report on manufacturing, showing growth for the third month in a row in August, further bolstered investor interest in crude oil.

The Institute for Supply Management said its purchasing managers index for the manufacturing sector climbed to 55.7 in August, the highest point in 2013. Analysts had expected the index to drop from July.

"Stronger macroeconomic data such as the US ISM manufacturing index is helping support a rally in the equity markets that is also broadly supportive for the oil market, although we note global petroleum demand remains at what we consider a 'below trend' pace of growth," said Tim Evans of Citi Futures.

Earlier in the day oil prices spiked sharply higher after a surprise missile test in the Mediterranean amid rising tensions over Syria's long-running civil war.

Russia's defense ministry said it had detected the launch of two ballistic missiles from the central Mediterranean fired toward the sea's eastern coastline.

The Israeli defense ministry said the missile launch was part of joint US-Israeli military exercises, and the Pentagon said it had no connection to possible attacks against the Syrian regime.

© AFP 2014

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