|Oil jumps to two-year high on war fears
New York oil rallied to the highest level for more than two years today, with concerns about Middle East supplies intensifying as the US and Britain prepare for possible military action against Syria.
New York's main contract, West Texas Intermediate for delivery October, soared to US$112.24, reaching a level last seen in early May 2011, AFP reports.
Later, it was showing a net gain of 96 US cents to US$109.97 a barrel as traders banked substantial gains.
Brent North Sea crude oil jumped to US$117.34 -- the highest point since late February. Brent went on to trade at $115.31 a barrel, up 95 US cents compared with Tuesday's close.
"The potential for military action [against Syria] in a matter of days or weeks has helped to lift oil prices,'' said Michael McCarthy, analyst at CMC Markets.
Crude futures had already leapt to their highest level in 18 months on Tuesday as Western threats against Syria stoked worries over oil supplies from the Middle East region.
"While Syria is not a big producer of oil, the potential for the conflict to escalate in the Middle East is likely to continue to push prices higher, unless we see attempts from the US to ease concerns about some form of military action,'' said Alpari trading group analyst Craig Erlam.
Analysts say a military strike targeting President Bashar al-Assad's regime could further ratchet up tensions in the oil-producing Middle East, which is already wracked by the festering political crisis in Egypt.
"Chatter in dealing rooms is all about the wider consequences of what a military strike on Syria will mean,'' said dealer Jonathan Sudaria at Capital Spreads.
"Although consensus appears to be for a precision surgical strike from the West, it is the consequences of the geopolitical shrapnel that will be flung all over the region that has traders heading for their bunkers.''