Oil prices jump after US missile strike on Syria

Friday, April 7, 2017 - 09:30

Oil prices spiked after the U.S. launched a missile strike on a Syrian government target.

U.S. crude futures jumped more than 2% in early Friday trading after President Trump ordered the first direct American military action against the regime of Syrian President Bashar al-Assad. They pared those gains later.

The strike, in which U.S. warships fired 59 Tomahawk cruise missiles at a Syrian government airbase, ramps up uncertainty in the oil-rich and politically unstable Middle East.

"Geopolitics are often big drivers in oil markets," said Greg McKenna, chief market strategist at AxiTrader. "The U.S. strike against a regime that is backed by the Russians, and in a country where the Iranians are active as well supporting the regime has the potential to cause further political ructions."

The potential reactions from Iran and Russia, both major oil producers, "will keep oil traders on edge," he said. "That uncertainty supports prices ... in the very immediate term."

U.S. crude, which suffered a sharp drop in early March, hit its highest level in a month on Friday. But by midday in Europe, its gains had eased, leaving it trading up just 0.3% around $52 a barrel.

Analysts at JBC Energy Research cautioned that the price spike "could disappear as quickly as it emerged."

SOURCE: http://money.cnn.com