The oil market has been volatile over the past two weeks as traders’ feared war in the Middle East. Syria is not a particularly large oil producing nation but the region as a whole is, and a US-led invasion of Syria could disrupt supply lines.
Russia has recommended that Syria hand over its chemical weapons, a move welcomed by President Obama, and this has brought stability to the oil market. The situation will remain in focus over the coming days though and if tensions should rise again oil could tick higher.
The US Department of Energy announced that oil inventories dropped by 219,000 on the week, against the market consensus for a drop of over two million barrels. Since the decline in stockpiles was much less than anticipated, it would suggest that demand was not as high as originally thought and explains why the price of oil slipped after the announcement.