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US oil ends above $110; Syria factor boosts prices

Reuters with CNBC.com
Wednesday, 28 Aug 2013 | 2:47 PM ET
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Crude oil on both sides of the Atlantic rose Wednesday, with U.S. oil closing at its highest level in nearly two years, as investors worried about the fallout from a potential strike against Syria, and the impact on supply.

U.S. crude skyrocketed to an intraday high at $112.15—its highest since May 2011—but pared gains to settle at $110.10, up $1.09 on the day. Traders booked some profit on a two-day rally that sent West Texas Intermediate up by 7 percent.

The threat of Western countries entering the Syrian conflict stirred concerns over oil supply security in the Middle East, which pumps a third of the world's petrol. That pushed U.S. crude oil futures close to a 2½-year high, heading for their biggest weekly percentage gain in close to two months. Brent prices surged to a six-month high.

Brent bounced off a six-month high of $117.34 a barrel, trading up about $1 under $116. That's up 6 percent over the last two days.

Crude was also supported by data showing stocks at the key Cushing, Okla., storage hub fell for the eighth-straight week to their lowest level since March 2012, weekly data from the U.S. Energy Information Administration (EIA) showed.

Oil supplies at Cushing fell by 837,000 barrels to 36.59 million barrels in the week to Aug. 23, with the inventory draw over the last eight weeks totaling 13.06 million barrels. However, U.S. domestic oil production rose to 7.61 million barrels per day (bpd) last week to its highest level since October 1989, EIA said.

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—By Reuters with CNBC.com.

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