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Oil markets tense after western strikes on Syria, but rising U.S. drilling weighs

Published 16/04/2018, 02:40
© Reuters. FILE PHOTO: Oil barrels are pictured at the site of Canadian group Vermilion Energy in Parentis-en-Born
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By Henning Gloystein

SINGAPORE (Reuters) - Oil prices fell on Monday as markets opened the week cautiously following western air strikes in Syria over the weekend, and as American drilling for new production continued to rise.

The United States, France and Britain launched 105 missiles on Saturday, targeting what they said were three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma on April 7.

Brent crude oil futures (LCOc1) were at $71.87 per barrel at 0124 GMT, down 71 cents, or 1 percent from their last close.

U.S. West Texas Intermediate (WTI) crude futures (CLc1) were down 59 cents, or 0.9 percent, at $66.80 a barrel.

Traders said markets in Asia began cautiously after the weekend strikes, while oil markets also came under pressure from a rise in U.S. oil drilling activity.

U.S. energy companies added seven oil rigs drilling for new production in the week to April 13, bringing the total to 815, the highest since March 2015, energy services firm Baker Hughes said on Friday.

Despite this, Brent is still up more than 16 percent from its 2018 low in February, due to healthy demand and also because of conflict and tension in the Middle East.

Although Syria itself is not a significant oil producer itself, the wider Middle East is the world's most important crude exporter and tension in the region tends to put oil markets on edge.

© Reuters. FILE PHOTO: Oil barrels are pictured at the site of Canadian group Vermilion Energy in Parentis-en-Born

"Investors continued to worry about the impact of a wider conflict in the Middle East," ANZ bank said.

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