Oil prices on the rise as US gains support on Syria

(AFP) – Oil prices rose on Thursday on supply concerns after US President Barack Obama cleared the first legislative hurdle in his race to win congressional backing for military strikes on Syria.

Brent North Sea crude for delivery in October gained 44 cents to stand at $115.35 a barrel around midday in London.

New York’s main contract, West Texas Intermediate for October, gained 60 cents to $107.83 a barrel.

The gains came after the US Senate Foreign Relations Committee backed an amended resolution authorising strikes in Syria, albeit with a 90-day deadline and barring the use of ground forces for combat purposes.

Obama was meeting world leaders in Russia on Thursday as he strives to bridge deep divisions over his push for action triggered by an alleged chemical weapons attack on Damascus suburbs.

Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said the initial expression of support from Congress had increased the likelihood of military action.

This has raised concerns “that the unrest may spread in the Middle East region, which accounts for a third of the world’s crude, and disrupts oil supplies”, she told AFP.

Chua Hak Bin, economist at Bank of America Merrill Lynch, said high oil prices could hurt economic growth.

“An oil price surge comes at a particularly bad time, when several Asian countries — particularly India and Indonesia — are already facing pressures from high inflation, large fuel subsidies, and widening oil-trade deficits,” he said in a note to clients.

Editor’s Note: Local fuel prices in Costa Rica generally trail world oil price increases or decreases by about 60 days.