Brent oil price is back over $105 as Middle East supply concerns re-emerge

The price of Brent crude oil is back over $105 a barrel this morning as Middle East supply concerns re-emerge with fierce fighting in Syria taking the main stage, offsetting supply concerns that are keeping oil prices in a tight range for now.

Latest Brent Oil Price

In London, Brent crude oil futures for July 2013 delivery was trading at $105.11 a barrel, 07:11 GMT this morning on the ICE Futures Exchange. The European contract closed off Monday’s session at $104.77.

Speculative bets that Brent prices will rise, in futures and options combined, outnumbered short positions by 130,219 lots in the week ended May 14, ICE said in its weekly Commitment of Traders report. The gain of 6,184 contracts, or 5 percent, is a third straight weekly increase and brings net-long positions to the highest since April 2.

Syria Conflict

The main opposition movement in Syria warned in a statement on Sunday that there may be a civilian massacre in Al-Qusair, a key strategic oil hub for the country. The movement had said that President Bashar al-Assad’s troops have leveled homes with rocket fire.

On Saturday Syrian president Bashar al-Assad gave an interview to the Argentine newspaper Clarin and the Argentine state news agency Telam, from his palace in the Syrian capital, Damascus. He vowed to keep power, accusing Israel and other foreign powers of supporting the Islamist opposition.

According to a recent report in The Guardian, the European Union is now directly funding US backed Sunni Islamist terrorist groups fighting Syrian President Bashar al-Assad’s regime. These groups are looting oil in parts of eastern Syria that they control and then re-selling it to EU countries at rock-bottom prices.

“Traders always get nervous when these kinds of things are going on, as Middle East tension plays on crude oil prices. If fighting in Syria spills over into Iraq and interrupts production there, that would be problematic,” said Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management.

“The conflict in Syria looks like it’s getting serious and the dollar is heading lower, while continuing high inventories are putting downward pressure on prices,” said Victor Shum, managing director of IHS Consulting,Singapore.

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Brent oil price is back over $105 as Middle East supply concerns re-emerge