Oil prices hit a one-month high on Friday after the United States attacked a Syrian government airbase, sending shockwaves through global markets and raising concerns of the conflict spreading in the oil-rich region.
The toughest U.S. action yet in Syria's six-year-old civil ramped up geopolitical uncertainty in the Middle East. Oil, gold, foreign exchange, German and U.S. 10-year bonds, all reacted strongly to the air strikes.
Brent crude futures LCOc1 were up 88 cents at $55.77 a barrel at 0827 GMT, the highest since March 8, after reaching an intra-day high of $56.08 a barrel shortly after the overnight air strikes were announced.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 85 cents at $52.55 a barrel, having reached a intra-day high of $52.94 a barrel.
"Oil markets are back in a bullish mode after the setback of the previous weeks. This news flow seems to bring geopolitical risks back on the radar," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.
Although Syria has limited oil production, its location and alliances with big oil producers in the region mean any escalation of the conflict has the potential to increase supply-side fears.
Other analysts were more cautious, saying the conflict in Syria had no bearing on oil fundamentals.
"This might just be a speculative move higher because there's nothing fundamental that's supporting this rise," said Hamza Khan, head of commodities strategy at ING.
Oil markets remain oversupplied, even with efforts led by the Organization of the Petroleum Exporting Countries to cut supplies to prop up prices.
Russia, which is part of a deal between OPEC and non-OPEC oil producers struck late last year to rein in supplies, said on Friday it was to early to say whether a deal could be extended into the second half of the year.
The government has held discussions on a possible deal extension with domestic oil producers, said Russian Energy Minister Alexander Novak.
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