Oil price at the weekend settled at the highest level in more than two years as investors rushed to buy amid concerns that a possible military strike against Syria could cause oil prices to spike.
This came as demands for Nigerian oil, which accounts for 85 per cent of its budget, increased slightly at the global oil market.
The country produces about 2.3 million barrels of crude daily.
Meanwhile, crude oil for October delivery settled up 2 per cent, or $2.16 per barrel, at $110.53.
The last time crude oil futures settled above that level was on 3 May 2011, at $111.05.
Brent oil, the global benchmark, has already priced in geopolitical concern over Syria. Brent crude oil futures for October delivery settled up 86 cents per barrel to $116.12, on Friday, Reuters reported.
Investors feared a US-led military strike against Syria would stir broader conflict in the Middle East, which pumps a third of the world’s oil.
“The longs piled back in on regional fears related to Syria,” Gene McGillian, energy analyst with Tradition Energy in Stamford, Connecticut, told Reuters.
The US Congress is expected to vote this week on President Barack Obama’s proposal to launch a missile strike to punish Syrian President Bashar al-Assad for his suspected use of chemical weapons against civilians.
“The escalation of the rhetoric and tension has certainly gotten the crude oil market’s attention,” said Andy Lebow, vice president with Jefferies Bache in New York.
At the G20 summit in St Petersburg, Russia, Obama has faced growing pressure from Russia, China, the European Union and major emerging market countries not to carry out a strike without support from the UN Security Council.
But Obama said failure to act against Syria’s use of chemical weapons would embolden “rogue nations” to use them too. Obama said he would address the American people on Syria on Tuesday.
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