Chemical Weapons In Syria Push Up Crude Oil Prices...

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WTI crude oil futures were trading slightly higher tracking a similar movement in benchmark NYMEX contracts. The US dollar has fallen from its highs in the low 83.00 price range to trade at 82.72 this morning, making dollar denominated commodities like crude oil cheaper. In the international market, crude oil futures edged higher due to a weak dollar against the euro and lower than-expected rise in the US crude oil stocks.

US crude oil inventory rose by 900,000 barrels from the previous week to 388.6 mln barrels in the week ended Apr 19, against market projection of 1.2 mln barrels rise. Crude is trading at 93.20 giving back 43 cents as traders took advantage of the climb over 93.00 to book profits.

Crude oil prices settled at two-week highs on concerns over tightening supplies, while U.S. gasoline demand heats up ahead of the peak spring-summer driving season. Traders said weakness in the dollar, rising equities prices and news that U.S. weekly claims for jobless benefits fell to the lowest level in nearly five years added to buying interest. Data showed a sharp fall in the U.S. jobless claims last week. The initial claims for jobless benefits was 339,000 in the week ending April 20, down16,000 from the revised figure of 355,000 in the previous week, the U.S. Labor Department reported yesterday. Meanwhile, the four-week moving average, which helps smooth out week-to-week volatility, edged down to 357,500 from 362,000 in the previous week. Recent job data signaled an improving labor market, but still not strong enough to significantly cut the unemployment. The U.S. unemployment rate dropped to 7.6% in March.

Prices also got support from the reports over Syria’s possible use of chemical weapons stirred concerns over stability in the Gulf region. Oil prices jumped after the United States said Syrian government forces had likely used chemical weapons, raising worries that Washington would punish Damascus militarily. US officials said cautiously for the first time that they had evidence of the use of chemical weapons by the Syrian regime. This report was supported independently by France and Israel.
They stressed there was still not full agreement on the issue in the US intelligence community, but US Defense Secretary Chuck Hagel, speaking in Abu Dhabi, warned that use of such weapons “violates every convention of warfare.”

The report raised fears that Washington could intervene more deeply in the Syrian conflict, after having warned earlier that using such weapons would cross a “red line” in President Bashar al-Assad’s fight with rebels. A senior White House official said “all options are on the table” should use of the weapons be confirmed, a euphemism for military options being taken into consideration. But a US defense official stressed that a military intervention was not imminent.

Implied demand for gasoline–the most widely used petroleum product in the world’s biggest oil consumer–climbed to its highest level since November last week, U.S. government data showed. Gasoline stockpiles logged their biggest drop in a year, breathing new life into futures contracts that fell to a four-month low in recent days.

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News Source: www.marketwatch.com