By mid-afternoon in New York, the price of crude was up 0.84% at $109.92 a barrel, after having traded higher than $112 a barrel earlier in the session, its highest price since 3 May 2011.
The steep price of oil reveals the depth of the anxiety over the situation in Syria and the Middle East in general. Unrest in Egypt has been supporting oil prices for some weeks now and as tensions in Syria have escalated, there has been a corresponding response in the oil market, with a strong concern being the possibility of a spillover of hostilities into neighbouring countries which could threaten larger supply disruptions in countries with significant oil production.
The price of US crude oil has increased 20% so far this year, despite surging domestic production and historically-high stockpiles. The Energy Information Administration (EIA) published its weekly petroleum status report today. The data showed that US crude output rose 1.2% last week, reaching its highest level since 1989, while stockpiles expanded by 3.0 million barrels.
Normally such a substantial build would be expected to pressure the oil price, but the prospect of an attack on Syria has been today’s main driver of price movement.