Oil Spot Price: Brent Steady Above $115 on Syria Worries

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on Sep 4, 2013
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iNVEZZ.com, Wednesday, September 4: Brent crude oil price today steadied above $115 a barrel, supported by renewed concerns that a possible US-led military strike against Syria might lead to disruption of Middle East oil supplies. While the Arab country is not a big producer, a military action against the Syrian regime could spread unrest in the Middle East and disrupt supply from the region that pumps a third of the world’s crude.

**Obama Wins Backing from key Congress members**
US President Barack Obama has won the support of key members of the US Congress for a limited strike against Syria in response to the alleged use of chemical weapons by the Syrian government against civilians. Meanwhile, Russian President Vladimir Putin has said in an interview with the AP and Russia’s

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First Channel that Moscow did not rule out approving a strike against Syria if clear evidence is presented that the government is responsible for the gas attack. These developments have stoked concerns that Middle East oil supplies might be disrupted if the conflict widens.

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“We believe a limited U.S. strike, if indeed realised this month, would only see a temporary spike,” in case there are no supply disruptions elsewhere, said Andrey Kryuchenkov of VTB Capital, as quoted by Reuters.
According to Kryuchenkov, Brent’s upside is limited near $117 a barrel with key resistance level between $119-$120. The market is supported at $109 on the downside, he opined.

The Brent oil price was down 41 cents at $115.27 as of 13:34 BST, while WTI fell 0.53 cents to $108.01.
Goldman Sachs also believes that a strike against the Middle Eastern country would lift the oil price, but argues that Brent is unlikely to exceed $125.
“Brent prices above a level of around $125 are unsustainable in our view, as OECD strategic petroleum reserves (SPR) act as significant spare capacity,” investment bank’s analysts opined, as quoted by Reuters.

!m[Obama Wins Leading US Lawmakers’ Support for Limited Strike](/uploads/story/5285/thumbs/pic1_inline.jpg)
**Supply disruptions**
A Syria strike could add to already existing supply outages in the Middle East and Africa, estimated at more than three million barrels per day, or some 3.5 percent of global demand. Libya’s oil exports currently are at below 10 percent of export capacity as armed groups tighten their grip on the sector.
Sudan’s decision to lift a threat to block exports from Southern Sudan provided some relief, although Juba’s output at 200,000 barrels per day is still lower than before the conflict shut its entire production.

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Oil Spot Price Rises on Strong Chinese Data Oil Spot Price: Brent Hovering around $114

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http://nvz.bz/13CTjSM

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