IV:Crude oil futures decline as investors book profits from Syria-rally
Investing.com - Crude oil futures edged lower on Thursday, retreating from the highest level since May 2011 as investors speculated military action against Syria was not imminent.
Prices rallied sharply in recent sessions as speculation mounted the U.S. was moving closer to taking military action against Syria’s government.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD108.89 a barrel during European morning trade, down 1.1%.
The October contract settled 1% higher at USD110.10 a barrel on Wednesday, after hitting a high of USD112.22 a barrel, the strongest level since May 3, 2011.
Oil futures were likely to find support at USD105.89 a barrel, the low from August 27 and resistance at USD112.22 a barrel, Wednesday’s high.
Market participants awaited word on possible U.S.-led military action against Syria.
On Wednesday, President Barack Obama said the U.S. has concluded that the Syrian government carried out a chemical weapons attack near Damascus, but added that he had not yet made a decision about whether to intervene militarily.
While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.
Market players are also concerned about the involvement of Iran, OPEC’s sixth-biggest oil producer.
Comments by Iran's military chief of staff Hassan Firouzabadi on Wednesday suggested that Tehran would attack Israel if Washington decides to strike Syria.
Oil traders now looked ahead to U.S. second quarter growth figures scheduled for later in the day as well as the weekly report on initial jobless claims, which will be scrutinized for its potential impact on the Federal Reserve's monetary policy stance.
Uncertainty over the timing of a reduction in the Fed’s bond-buying program continued after data showed that U.S. pending home sales fell unexpectedly in July.
Industry data showed that U.S. pending home sales declined 1.3% last month, more than the expected 0.5% fall, after a 0.4% loss the previous month.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery dropped 1.2% to trade at USD115.22 a barrel, with the spread between the Brent and crude contracts standing at USD6.33 a barrel.
Brent prices hit USD117.32 a barrel on Wednesday, the highest level since February 20.
French lender Societe Generale said London-traded Brent prices may rise to as high as USD150 a barrel if conflict disrupts supply from the Middle East and North Africa.
Countries in the Middle East and North Africa were responsible for 36% of global oil production and held 52% of proved reserves in 2012.
