Futures Movers: Oil prices drop after last week’s big gains, as Syria-risk fatigue sets in

Oil prices fell Monday, reversing a fraction of last week’s pop to a near 3 1/2-year high, as investors took weekend airstrikes on Syria in their stride.

May West Texas Intermediate crude CLK8, -1.13%  lost 58 cents, or 0.9%, to $66.81 a barrel. Last week, the U.S. oil benchmark rallied by roughly 8.6%, which was the strongest weekly performance by percentage since late July of last year.

June Brent LCOM8, -1.25% dropped 68 cents, or 0.9%, to $71.90 a barrel on ICE Futures Europe. The international benchmark rose 8.2% last week. Both the U.S. benchmark and crude last week tapped levels not see in more than three years.

A barrage of American, French and British missiles launched on Saturday destroyed much of Syria’s chemical-weapons capabilities, but left President Bashar al-Assad’s conventional military intact, according to U.S. Defense Department officials.

Oil prices climbed last week on fears of an escalation in tensions over Syria, which put Assad-supporter Russia in a war of words with the U.S., and in anticipation of military strikes.

The missile launch was made in response to a suspected chemical-weapon attack that killed civilians in Damascus, an incident that drew widespread condemnation. On Sunday, Syrian armed forces launched fresh strikes at rebels, as Assad’s regime attempted to show his regime’s strength remained intact.

Read: Trump felt misled, angry over expulsion of 60 Russian diplomats: report

Investors were taking profits on Monday, said Stephen Innes, senior trader with Oanda, on the expectation that neither Russia nor Iran, another Assad supporter, would retaliate to the strikes, which were limited to the chemical-weapons facilities.

“Nevertheless, Middle East tensions and geopolitical risk remain incredibly high suggesting the oil markets risk premiums will stay in check, as the global oil supplies remain vulnerable to any significant supply disruption,” said Innes in a note to clients.

On Friday, the IEA indicated that global oil stockpiles are dwindling and approaching the five-year average the Organization of the Petroleum Exporting Countries is targeting.

Baker Hughes BHGE, +1.37%  on Friday reported that the number of active domestic oil rigs edged up by seven this week. The figure, which offers a peek at U.S. oil activity, was up for a second straight week.

Among energy products, gasoline RBK8, -1.01%  fell 0.8% to $2.049 a gallon, while May heating oil HOK8, -1.02% shed 0.8% to $2.084 a gallon. Those contracts saw gains of 5.7% and 7.3%, respectively, last week.

May natural gas NGK18, +0.29%  rose 1 cent, or 0.3%, to $2.743 per million British thermal units, rising 1.3% last week.

Filed in: Top News Tags: 

You might like:

Futures Movers: Oil prices spurred higher by Trump’s Iran tweet Futures Movers: Oil prices spurred higher by Trump’s Iran tweet
This 18-year-old’s hacking side hustle has earned him $100,000 — and it’s legal This 18-year-old’s hacking side hustle has earned him $100,000 — and it’s legal
Metals Stocks: Gold retreats as dollar climbs to start the week Metals Stocks: Gold retreats as dollar climbs to start the week
Earnings Outlook: Earnings preview: AT&T, a modern media company in the making Earnings Outlook: Earnings preview: AT&T, a modern media company in the making
Economic Report: Existing-home sales slide for third-straight month in June, touch 5-month low as housing sputters Economic Report: Existing-home sales slide for third-straight month in June, touch 5-month low as housing sputters
Tax Guy: How your loved ones can cash in on the 0% tax rate on long-term capital gains Tax Guy: How your loved ones can cash in on the 0% tax rate on long-term capital gains
Economic Report: Chicago Fed national economic indicator helped by factory-sector snapback Economic Report: Chicago Fed national economic indicator helped by factory-sector snapback
Earnings Outlook: Amazon earnings: Prime Day isn’t the only thing giving business a boost Earnings Outlook: Amazon earnings: Prime Day isn’t the only thing giving business a boost

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.