Wednesday, April 11, 2018

Oil prices jump to three-year high after Trump warns Russia missiles 'will be coming' in Syria

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(TRUMP) Get ready Russia, because they will be coming, nice and new and "smart!" You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it! 

Tom DiChristopher    | @tdichristopher
Published 2 Hours Ago Updated 10 Mins Ago 

    Oil prices hit their highest level since early December 2014 after President Donald Trump warned Russia to prepare for a strike on its ally, Syria.
    The Russian ambassador to Lebanon earlier said his country would intercept any U.S. attack on Syria and potentially target the craft that fired missiles.
    Crude futures tacked on gains following a strike on top oil exporter Saudi Arabia by rebels in neighboring Yemen.

Oil prices hit new 2018 highs as missile strikes on top crude exporter Saudi Arabia added to the market's worries about escalating conflict between the United States and Russia in Syria.

Brent, the benchmark for international oil prices, earlier climbed to its highest level in more than three years after President Donald Trump earlier warned Russia to "Get ready" for a U.S. missile attack on Syria, whose government Moscow has backed during its seven-year civil war.

The threat came after the Russian ambassador to Lebanon said his nation's military would intercept American missiles and potentially target the U.S. craft that fired them. The potential American strike follows a suspected chemical attack on the rebel-held city Douma, allegedly by forces loyal to Syrian President Bashar Assad.

    @realDonaldTrump: Russia vows to shoot down any and all missiles fired at Syria. 
Get ready Russia, because they will be coming, nice and new and "smart!" You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!

Brent crude prices were at $72.47 a barrel, up $1.43, or 2 percent from Tuesday's closing price. The contract earlier rose to $73.09, the highest level since Nov. 28, 2014, when it hit $73.41.

U.S. West Texas Intermediate crude were up $1.54, or 2.4 percent, to $67.05. WTI rose as high as $67.45, a session peak going back to Dec. 4, 2014, when it touched $68.22.

John Kilduff, founding partner at energy hedge fund Again Capital, earlier on Wednesday said the number to watch from a technical level is U.S. crude's previous 2018 high of $66.66.

"If we get through that we're going to go to $70," he said.

The morning price spike was completely due to the Trump tweet, which left the market to parse the president's meaning, according to Kilduff. The question is whether he will order the military to solely target Syrian assets, or take aim at Iran, which also backs Assad and has a large presence in Syria.

Such an attack would come just one month before Trump faces a deadline that could see him restore sanctions on Iran, OPEC's third largest oil producer.

"That's the crux of the matter. Is it a pin prick or is it something that sets us up for escalation?" said Kilduff.

Saudi Arabia's air defense forces intercepted at least three ballistic missiles fired at Saudi cities by Yemen's Houthis, who claimed to have targeted the defense ministry in Riyadh and a Saudi Aramco distribution facility in Najran on Wednesday.

Three rockets were intercepted in the capital and the southern cities of Jizan and Najran, according to state media and the Saudi-led coalition fighting the Iran-aligned Houthis in Yemen.

The headlines followed reports that the Houthi rebels in Yemen had launched a drone strike on a facility owned by Saudi Aramco, the kingdom's national oil giant.

The Saudi-led invasion of Yemen has contributed to oil's geopolitical risk premium, as Houthis target Saudi oil assets. Last week, the Houthis attacked a Saudi oil tanker.

The new records came despite government data showing U.S. crude stockpiles rose unexpectedly and American crude production continued to hit new highs.

U.S. commercial crude inventories rose by 3.3 million barrels in the week through April 6.

Analysts in a Reuters survey had anticipated a decline of 189,000 barrels a day. Figures released Tuesday afternoon by industry group the American Petroleum Institute had suggested crude stocks rose by 1.8 million barrels a day.

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