Oil prices hit new 2018 highs as missile strikes on top crude exporter Saudi Arabia added to the market's worries about escalating conflict between the United States and Russia in Syria.
Brent, the benchmark for international oil prices, earlier climbed to its highest level in more than three years after President Donald Trump earlier warned Russia to "Get ready" for a U.S. missile attack on Syria, whose government Moscow has backed during its seven-year civil war.
The threat came after the Russian ambassador to Lebanon said his nation's military would intercept American missiles and potentially target the U.S. craft that fired them. The potential American strike follows a suspected chemical attack on the rebel-held city of Douma, allegedly by forces loyal to Syrian President Bashar Assad.
@realDonaldTrump: Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and "smart!" You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!
U.S. West Texas Intermediate crude ended Wednesday's session up $1.31, or 2 percent, at $66.70, its best settle since Dec. 3 2014. During the session, WTI rose as high as $67.45, a peak going back to Dec. 4, 2014, when it touched $68.22.
Brent crude was at $72 a barrel, up 96 cents, or 1.4 percent, shortly before its settlement. The contract earlier rose to $73.09, the highest level since Nov. 28, 2014, when it hit $73.41.
John Kilduff, founding partner at energy hedge fund Again Capital, earlier on Wednesday said U.S. crude prices could be heading to $70 after breaking through the previous 2018 high of $66.66.
The morning price spike was completely due to the Trump tweet, which left the market to parse the president's meaning, according to Kilduff. The question, he said, is whether Trump will order the military to solely target Syrian assets, or take aim at Iran, which also backs Assad and has a significant presence in Syria.
Such an attack would come just one month before Trump faces a deadline that could see him restore sanctions on Iran, OPEC's third largest oil producer.
"That's the crux of the matter. Is it a pin prick or is it something that sets us up for escalation?" said Kilduff.
Saudi Arabia's air defense forces intercepted at least three ballistic missiles fired at Saudi cities by Yemen's Houthis, who claimed to have targeted the defense ministry in Riyadh and a Saudi Aramco distribution facility in Najran on Wednesday.
Three rockets were intercepted in the capital and the southern cities of Jizan and Najran, according to state media and the Saudi-led coalition fighting the Iran-aligned Houthis in Yemen.