(EnergyAsia, August 28 2013, Wednesday) — US WTI crude prices reached a new high for 2013 while Brent cruised to a six-month peak on escalating tensions in the Middle East as Western officials talked up the possibility of a military strike on Syria.
In New York, US WTI closed at US$109.01 after touching US$109.32 a barrel for its highest close since February 24 last year. Brent, the international benchmark, surged US$3.50 to US$114.42 a barrel for its highest close since February 26.
With military conflicts escalating in Egypt and Libya, the latest developments in Syria added to fears that geopolitical unrest is poised to threaten oil and gas supplies from the volatile Middle East-North Africa region.
The US and its allies have openly warned they are planning to attack the Assad regime following reports of a deadly chemical gas attack on civilians last week. At a security conference in Brunei, US Defence Secretary Chuck Hagel told the BBC that President Barack Obama was ready to order military action against the Syrian government of President Bashar Assad.
Russia and Iran have responded by warning the West that they would retaliate if Syria was attacked or invaded.
Libya, which is still wrecked by violence after the fall of the Gaddafi regime, has struggled to raise and maintain oil production. Apart from continuing acts of terror, Libya’s oil industry faces labour unrest which helped shut down the combined 600,000 b/d capacity of its two main export terminals at Ras Lanuf and Es Sider for most of August.
Libya’s production is fluctuating between 300,000 and 600,000 b/d, well below 1.5 million b/d before the country was plunged into civil war in 2011.
In Egypt, the clash between the ruling military and supporters of the previous Islamic government could spill over to threaten the region as well as the vital Suez Canal which handles large flows of oil and gas exports from the Middle East.