Oil prices fell 1% on Monday as markets opened for trading, following the Western air strikes on Syria earlier this week. Prices were subjected to additional pressure from the increase in the work of US drilling platforms.
The United States, France and Britain fired more than 100 rockets on Saturday, targeting what they said were three chemical weapons facilities in Syria, in response to a suspected gas attack on the city of Douma on April 7.
Brent crude futures traded at $71.85 a barrel, 73 cents, or 1 percent down from the previous close. US WTI crude fell about 57 cents, or 0.9%, to trade at $66.82 a barrel. According to analysts, Asian markets started cautiously after the Western strikes, followed by some relief after the military escalation began to be ruled out. While it is true that oil prices fell slightly after the strike, the impact seems limited.
Oil markets have also come under additional pressure due to an increase in drilling activities in the United States. US energy companies added seven oil refineries to pump new production over the week ending April 13, bringing the total to 815, the highest level since a month of 2015, Baker Hughes said on Friday. Brent is still up by more than 16 percent from the lowest level in 2018 recorded in February, because of the strength of demand and conflicts and tensions in the Middle East.
Syria is not a major producer of oil, but the Middle East in general is the world’s most important source of crude, and tensions in the region are often a concern for world oil markets. Experts say investors remain concerned about the impact of a wider conflict in the Middle East.