WTI rises on Syrian unrest, inventories data in focus

West Texas Intermediate rose for a third day in four as the U.S. put Syrian President Bashar al-Assad in notice on Monday it believes he was responsible for the chemical attack against civilians in the Damascus suburbs last week. Meanwhile, market players also eyed the upcoming oil inventories reports by the American Petroleum Institute and the Energy Information Administration.

On the New York Mercantile Exchange, WTI crude for October delivery rose to $106.18 per barrel at 7:23 GMT, up 0.24% on the day. Prices ranged between days high and low of $106.59 and $106.05 per barrel respectively. The contract retreated slightly on Monday, marking a 0.17% fall on the week after declining 1.24% the preceding five-day period.

Meanwhile on the ICE, Brent oil for delivery in October fell to $110.96 per barrel at 7:23 GMT, up 0.21% on the day. Prices ranged between days high of $111.26, near Mondays five-month high, while days low stood at $110.94 per barrel. The European benchmark fell slightly on Monday, marking a 0.10% weekly decline so far after settling 0.40% higher the preceding week.

The oil market continued to draw support amid escalating unrest in Syria that threatens to spread into neighboring countries, which could hurt Middle East supplies. The region accounts for a third of global oil output. U.S. Secretary of State John Kerry said that there is “undeniable” evidence the Syrian regime led by President Bashar al-Assad used chemical weaponry against civilians in the Damascus suburbs last week. Assad denied responsibility and blamed rebels for staging the attacks.

Ben Le Brun, a market analyst at OptionsXpress in Sydney, said for Reuters: “Any dips in oil prices will be well supported by tensions bubbling in Syria as that has the potential to spread into other parts of the region.”

Meanwhile, United Kingdoms foreign secretary William Hague said his country is convinced that Assads regime was behind the attack and that an agreement was met with the U.S. and France for the need of a response. The U.K. government will decide today whether to recall Parliament and seek approval for taking action. The U.S. and its allies have already met in Jordan for what could be a council of war.

Meanwhile in Libya, the Marsa al-Brega port loaded its first oil tanker during the weekend after reopening last week, according to AIS Live ship-tracking data on Reuters. At the same time, the countrys biggest terminal, Es Sider, remained closed. A Liberian-flagged tanker was fired at last week near the Es Sider port, following a warning that Libyan forces will attack tankers illegally exporting oil,

Inventories data

Market players will also be keeping a close watch on this weeks crude oil data. The industry-funded American Petroleum Institute will release its report later on Tuesday, but ti is considered as less reliable than EIAs statistics since it is based on voluntary information from operators of pipelines, refineries and bulk terminals.

The Energy Information Administration will publish its data at 12:30 GMT on Wednesday. According to a weekly Bloomberg survey of analysts, crude oil inventories should have risen by 700 000 barrels last week, the first gain in four weeks. U.S. gasoline stockpiles probably decreased by 1.25 million barrels, while distillate fuel reserves may have surged by 500 000 barrels. Refineries utilization is projected to have fallen by 0.2%.

Oil prices were also supported recently following downbeat U.S. new homes sales and durable goods orders, which dampened speculations that the Federal Reserve will begin decelerating its Quantitative Easing program in as early as September.

Ben Le Brun commented for Reuters: “Weve probably been putting the cart before the horse. If the tapering is pushed back later into 2013, that should be supportive of risk assets such as gold and oil.”

Market players will be keeping a close eye on this week’s U.S. economic data to further gauge Quantitative Easing’s tapering prospects. Tuesday’s Consumer Confidence is projected to have fallen to 79.3 in August from 80.3 in the preceding month. The S&P/Case-Shiller Composite-20 Home Price Index might also post a decline. Wednesday’s Pending Home Sales might have advanced by 0.1%. On Thursday, the Preliminary Revised GDP is likely to have grown by 2.3%, while consumer spending and core consumer spending (Personal Consumption Expenditures) probably surged by 1.8% and 0.8% in the second quarter respectively. Initial Jobless Claims probably fell by 1 000 in the week ending August 24. On Friday, Personal Income and Spending are expected to have advanced in July but at a slower pace than in June. Core PCE on monthly and annual basis likely rose in July and the Chicago PMI and Final University of Michigan Confidence are projected to have advanced in August as well.