Oil Prices Fluctuate Over Fears Of Western Air Strikes Against Syria

Investing.com – Oil prices fluctuated between mild gains and losses on Wednesday morning in Asia amid rising Middle East tensions and the possibility of air strikes on Syria in the next 72 hours.

 for May delivery were trading at $65.38 a barrel in Asia at 11:00PM ET (03:00 GMT), down 0.20%. for June delivery, traded in London, were down 0.30% at $70.83 per barrel.

Europe’s air traffic control agency Eurocontrol said air-to-ground and/or cruise missiles could be used within the next 72 hours. The U.S. and its allies are considering a strike against Syrian President Bashar al-Assad’s forces following a suspected poison gas attack last weekend.

Although Syria is not a key oil producer, the wider Middle East is the world’s most important crude exporter and tension in the region tends to disrupt oil markets.

Oil prices remain supported by easing concerns over a prolonged trade dispute between the U.S. and China after China’s President Xi Jinping gave a speech on Tuesday with a conciliatory tone.

for September delivery were up 1.63% at 416.80 yuan ($65.15) per barrel at 11:00PM ET (03:00 GMT) on Wednesday.

Healthy demand and the supply restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia also continue to support prices.

However, soaring U.S. crude production, which has increased by a quarter since mid-2016 to 10.46 million barrels per day (bpd), is undermining OPEC’s efforts to tighten the oversupply and prop up prices.

The U.S. Energy Information Administration (EIA) said on Tuesday that it expects domestic crude oil production in 2019 to rise by more than previously expected, to 11.44 million bpd.

That would make the U.S. the world’s biggest oil producer by 2019, surpassing Russia which currently pumps out around 11 million bpd.

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