Oil Prices Could Fall Following A Limited U.S. Led Strike In Syria

While the geopolitical risk has been falling in Europe as European governments and central banks stepped up to ease Eurozone tensions, the latest events in Syria have raised the temperature and the ugly geopolitical risk has raised its head again. The growing possibility of some form of a limited U.S. led strike in Syria has increased fears about the stability of the world's key oil producing region. Until the nature of the possible military intervention becomes apparent, these concerns are likely to put upward pressure on oil prices.

Oil markets have reacted strongly to the deteriorating situation in the Middle-East and prices have spiked sharply due to the unpredictable consequences of a likely military action against Syria. Brent crude spot is currently trading at a six-month high of $115 and prices are expected to remain volatile leading up a military strike on Syria. However, prices could fall sharply after a strike, as the actual supply losses remain small and the chances of a violent response from Syria, Russian, or Iran also remain low. Nevertheless, unpredictable factors weigh heavily in the market for good reasons.

Oil drops below $95 a barrel as dollar rises

The price of oil dropped below $95 a barrel as a strengthening dollar made crude more expensive for traders using other currencies.
In Europe, benchmark crude for June delivery was down $1.74 to $94.65 a barrel in electronic trading on the New York Mercantile Exchange.
Since oil is traded in dollars, a stronger dollar makes crude and other commodities less appealing to investors with other currencies.
Recent signs of improvement in U.S. employment data have sparked speculation that the Federal Reserve might scale back its aggressive monetary policy.

Oil slips to $103 on tepid growth outlook

Brent crude oil slipped to $103 per barrel as an uncertain outlook for growth in the world's two largest oil consumers, the United States and China.
Oil rallied from nine-month lows on expectations that stronger global economic activity would encourage more fuel consumption, but disappointing data capped the recovery.
Brent lost 16 cents to $103.00 per barrel. U.S. crude was up 15 cents at $93.15 a barrel.
Brent is more than 6 percent below its starting point in April, pressured by data suggesting the global economy remains on a fragile footing at best.

European refiners face dwindling fortunes

Squeezed between shrinking exports to the United States, game-changing giant Middle East refineries and dwindling domestic demand, more European refineries are likely to face the axe.

Demand for refined product in Europe is set to decline by 170,000 bpd every year over the coming five years, leading to the closure of two small refineries or one large refinery.

Oil major Shell announced that it was considering the sale of the bulk of its downstream business in Italy, following the recent sale of refineries in Britain and Germany. Overall European refining margins, or cracks, averaged at $5.46 a barrel in March, compared with $22.83 a barrel in the United States, where refiners enjoy significantly lower crude prices.

Brent drops below $99; demand worries persist

Brent crude fell below $99 per barrel weighed by the prospect of sluggish fuel demand in top consumers in the United States and China and in addition to rising stockpiles of U.S. crude.

More bleak economic news came courtesy of the International Monetary Fund (IMF), which trimmed projections for this year and next - implying limited upside for oil demand growth.

The North Sea benchmark has lost nearly 6 percent over the past five sessions in a wider commodities rout triggered by data showing growth in China, the world's second largest oil burner, had slowed unexpectedly in the first three months of 2013.

The head of the International Energy Agency, Maria van der Hoeven, said the oil price decline was proof that the market was adequately supplied.

Brent crude shed $1 to $98.91 after sinking earlier to $98.80, the weakest since July 2012. U.S. crude slipped $1.29 to $88.43.

Oil up as China trade, US earnings show recovery

The price of oil rose to above $94 a barrel, propelled by a rebound in China's trade growth and an encouraging start to the U.S. corporate earnings season.

In Europe, benchmark crude for February delivery was up $1.04 to $94.14 a barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 5 cents to end at $93.10 per barrel in New York.

Current data released showed China's export growth in December more than quadrupled from the previous month's level to 14 percent. Imports rose 6 percent, after failing to grow at all in November, in a sign of increasing domestic demand.

Analysts also pointed to an 8 percent year-on-year rise in China's imports of crude oil in December and a 6.8 percent increase for all of 2012. The data was a boost for energy prices, since a pickup in economic activity in the world's second-largest economy could boost demand for oil.

In the U.S., corporate reporting season began with better-than-expected results. That helped lift stock markets and energy prices followed.

Brent crude, used to price international varieties of oil, was up 89 cents to $112.65 a barrel on the ICE Futures exchange in London.