Crude oil futures lower on profit taking, US rig count rise

Singapore (Platts)--16 Apr 2018 300 am EDT/700 GMT

Crude oil futures were lower in mid-afternoon trade Asia Monday as investors booked profits after the air strikes on Syria led by the US, UK and France.

Market participants were waiting to see how Russia reacted after US President Donald Trump's administration signaled it would impose new sanctions on Russia for supporting the Syrian regime.

At 2:28 pm Singapore time (0628 GMT), June ICE Brent crude futures were down 70 cents (0.96%) from Friday's settle at $71.88/b, while the NYMEX May light sweet crude contract was down 56 cents (0.83%) at $66.83/b.

A daily candlestick chart seen by S&P Global Platts showed the ICE June Brent Futures contract moving in a range of $1.12/b, touching an intraday low of $71.73/b and intraday high of $72.85/b.

The NYMEX light sweet May contract was moving in a range of $1.10/b, between an intraday low of $66.64/b and intraday high of $67.74/b.

The number of active rigs in the US rose 7 to 815 last week, the second consecutive weekly rise, according to Baker Hughes data released late Friday.

"Syria risk fatigue will likely set in today [Monday], we should expect some profit-taking to occur," said Stephen Innes, APAC head of trading at OANDA. "Nevertheless, Middle East tensions and geopolitical risk remain incredibly high, suggesting the oil market risk premiums will stay in check as global oil supplies remain vulnerable to any significant supply disruption."

"Global political concerns look likely to remain a focus in the week ahead, so we should expect the markets to stay at the mercy of headline risk. However, so far the market is showing little appetite to chase risk assets higher," Innes added. Russian President Vladimir Putin has warned of "chaos" if Syria were to face a subsequent air strike.

Vandana Hari, founder at Vanda Insights, said: "The fact that the Western missile strikes were completed without triggering wider military hostilities within the region brought some relief to an oil market that had become progressively tense towards the end of last week. Despite the calming of tensions around Syria, crude continues to carry considerable geopolitical premium."

"Russia is the world's largest crude producer and a key collaborator with OPEC in the ongoing supply cuts. Though its oil production has not been affected by Western sanctions imposed since its annexation of Crimea in early 2014, several companies and financial institutions have stayed away from investing in the country for fear of attracting US ire," Hari added.

As of 0628 GMT, the US Dollar Index was 0.06% lower at 89.460.

--Jing Zhi Ng,

--Edited by Wendy Wells,

Copyright © 2018 S&P Global Platts, a division of S&P Global. All rights reserved.