US crude oil price heads back near $100 a barrel on Middle East concerns

US WTI crude oil could be heading back to $100 a barrel after hitting 11 month highs this morning, mainly due to concerns over Middle East oil supply as the US signaled arming the opposition in the Syrian war, which may draw in several key oil producing countries to the conflict.

Latest WTI Oil Price

US Light crude oil futures for August 2013 delivery was trading at $98.84 a barrel, 07:55 GMT this morning in electronic trading on the NYMEX. The contract has risen 12 percent in the last two and a half months.

Middle East Concerns

Concern that the conflict in Syria could spread and disrupt oil supplies from key producing countries in the Middle East has boosted oil prices in recent days.

“The oil price is currently being driven primarily by geopolitical aspects. The decision of the US to supply arms to the rebels in Syria threatens finally to turn the civil war in Syria into a proxy war between the world powers, given that Russia is providing military support to the Assad regime.” said Commerzbank analyst Carsten Fritsch.

Fed Meeting Results

Meanwhile traders and investors will also be keeping and eye on the US Fed’s stance on the bond buying program in America. To help support the US economic recovery, the Fed has been buying $85 billion in bonds every month in an attempt to keep interest rates low and encourage lending. The new money generated has flowed into financial system, helping many assets, including oil prices to climb up off the lows witnessed during the global recession following the 2008 / 2009 financial crisis.

Following the conclusion of its meeting on Wednesday, Fed chairman Ben Bernanke will hold a press conference and investors want to know what the Fed is planning, in particular when it may start reducing the amount of financial assets it is buying each month.

The results of the two day Fed policy meeting will likely ripple through markets once investors learn whether there will be changes in the US Fed’s strategy for shoring up the US economy.

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US crude oil price heads back near $100 a barrel on Middle East concerns