Oil Hits 9-Month High As Syria Tensions Escalate
U.S. oil prices rose to the highest level since September on Friday as tensions escalated between the U.S. and Syria.
WTI oil prices climbed more than a dollar to a session high of $98.25 a barrel, a level not reached since Sept. 17, 2012. Brent crude futures were up about $1.50 a barrel, reaching a session high of $106.64 a barrel, the highest price in over two months. Oil was trading slightly off the highs at midday.
Crude oil prices have been range-bound for more than a month until Thursday afternoon when it was reported that President Obama authorized shipment of U.S. weapons to Syrian rebels for the first time. The White House said it had proof that the Syrian government used chemical weapons against rebels. Oil prices extended their gains Friday morning.
(Read More: US to Increase Military Support to Syria Rebels)
"Oil prices moved right at the open (at 9 am ET), accompanied by a big jump in volume," said Addison Armstrong, senior director of market research at Tradition Energy. "The US proposing to arm Syrian rebels, train them inside Jordan, and implement a no-fly zone in Syrian airspace is a big increase in tension in the Middle East."
Although Syria is not a major oil producer, traders are worried about the reaction in Russia and Iran and the potential for conflict to spread in the Middle East region.
"One way or another, the Syrian conflict is escalating. It is not only morphing into a US-Russia proxy war but also into a US-Iran proxy war and nobody knows how this will terminate," says energy analyst Olivier Jakob of Petromatrix.
While geopolitics has returned as a key factor driving oil prices, supply issues are also front and center. A deadly accident at a North Sea gas platform may also be supporting Brent crude prices, says Again Capital's John Kilduff. Traders may worry about oil production as well from the region that provides supplies for Brent crude, the global oil benchmark.
—By CNBC's Sharon Epperson. Follow her on Twitter: @sharon_epperson