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Oil prices increased again today amid fears that possible military action by Western nations against Syria could disrupt crude supplies from the Middle East.

Brent gained by $1.73 to settle at $116.09 a barrel, while US crude was up by $2.30 to reach $111.31 a barrel, reported Reuters.

The US and its allies are expected to take military action soon against Syrian President Bashar al-Assad’s forces, which were blamed for using chemical weapons against civilians in the country last week.

Oil prices could get further support if the US Federal Reserve decides to taper its stimulus later than the anticipated September timeline.

Investors are awaiting inventory numbers from the US for last week, which are expected to provide some indications on energy demand in the world’s top consumer.

"The US and its allies are expected to take military action soon against Syrian President Bashar al-Assad’s forces."

Data from the American Petroleum Institute (API) showed that crude and distillate stocks increased last week, while gasoline inventories dropped.

Other factors supporting prices include a prolonged outage at seven oil fields in Libya.

The country’s deputy oil minister said the largest western oil fields were closed after an armed group shut a line that connects to ports.

According to a Reuters estimate, Libya’s oil output has now fallen to the lowest level since the 2011 civil war, to just less than 200,000 barrels per day, from pre-war levels of around 1.6 million barrels per day.


Image: Fears about military action in Syria and possible supply disruptions have boosted oil prices. Photo courtesy of freedigitalphotos/hin255.

Energy