Crude prices took a break on Thursday, as it ended it two-day surge with WTI dropping below the $110 threshold and Brent ending its strongest two-day rise by falling under $116 a barrel. While investors are still focused on the heated oil markets and new developments regarding Syria. US inventories were seen climbing for the first time in four weeks.
October deliveries for the North American WTI fell 1.11% to $108.86 a barrel on New York’s Nymex at the time of writing, while the European benchmark Brent crude retreated 1.15% to $115.28 a barrel at the same time. The prices for both WTI and Brent surged on Tuesday and Wednesday over fears of possible military intervention in Syria from the western nations.
Crude Prices – Geopolitical Crises
According to reports, the Syrian government was accused of allegedly using chemical weapons in their attacks against civilians, which reportedly have killed over five hundred people.
A team of United Nations (UN) weapon inspectors are still investigating the sites of the attack in Syria. UN Secretary General Ban-Ki-moon said the inspectors are expected to finish their investigations in four days and more time to examine their findings.
A group of nations including US, UK, France and Canada are supporting the intervention of the military against the Syrian government.
The current turmoil in the global markets was set off by investor’s worries over the possible military intervention, which could be disastrous consequences for the oil-rich Middle Eastern region. The Organisation of the Petroleum Exporting Countries (OPEC) estimates that the Middle Eastern region accounts approximately 53% of the world’s oil reserves.
24.1 million bpd of crude oil was produced by the Middle East in 2012, the most from a region. According to the US Energy information Administration, the most production growth has been in the Middle East.
Crude Prices – US stockpiles
The US crude inventories rose to 362 million barrels last week, first time in four weeks, according to the Energy Information Administration. Gasoline stockpiles declined by 587,000 barrels, while distillate inventories including heating oil and diesel, fell by 316,000 barrels.
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