Brent Steady Above $115 On Committee Approval
Benzinga | Sep 05, 2013 10:22AM ET
Brent crude oil was steady on Thursday as concerns about supply interruptions due to military strikes in Syria eased. The commodity traded at $115.09 at 6:45 GMT on Thursday morning.
Despite authorization to use military force in Syria being passed through the US Senate Foreign Relations Committee on Wednesday, Brent saw narrow gains as military strikes, if utilized, are expected to be quite limited.
Although the risk of a large scale intervention has been alleviated, military force in the Middle East has the potential to disrupt fragile relationships between the US and the region's major oil producers. The US has been working with lawmakers in Iran to settle a dispute over Tehran's nuclear development program, and many worry that military strikes in Syria will upset diplomatic relations between the two.
However, on the other hand, there is a lot of concern that if the West does not take action against the Syrian government's use of chemical weapons, they are sending a message that there are no consequences for violating international treaties. In this case, many are worried that Iran will not consider the international ramifications of creating weapons of mass destruction.
Brent prices have already been elevated recently as thinning global supply due to interruptions in Africa and the Middle East has some investors worried about the future. OPEC producer Libya is already operating at less than 10 percent of its normal export capacity as labor strikes have closed several of its largest export terminals. CNBC reported that the nation's exports have fallen as low as 80,000 barrels per day.
Secondarily, improved economic indicators from countries around the world indicated that the global economy is on the mend and helped buoy oil prices. With improvements from the US to Europe, many see global oil demand rising in the future as a result of expanding economies.
By Laura Brodbeck
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