Oil futures were higher Thursday as an emerging risk premium over the situation in Syria countered further signs of an economic slowdown in Asia and rising U.S. inventories.
On Wednesday Russia started air strikes in Syria in its biggest Middle East intervention in decades. The attacks raised the specter of Washington and Moscow running air strikes in the same region, but without coordination.
Brent crude was last up 2.49% at $49.58 a barrel
U.S. crude gained 3.44% to $46.64.
Russia's intervention spurs geopolitical risks which is giving tailwind to the prices, analysts say.
Prices were also supported by Hurricane Joaquin, which was gaining strength as it moved toward the Bahamas, the National Hurricane Center said. However, there was no definite information on if the storm would hit the U.S.
Oil and gas traders also monitor Atlantic hurricanes since they can lead to precautionary shutdowns of Gulf of Mexico oil and gas platforms or, in extreme cases, cause a harm to energy infrastructure.
Meanwhile, economic slowdown in Asia and overflowing U.S. oil stocks capped the rally.
Data released earlier Thursday signaled that activity in China's factories shrank and manufacturers' confidence worsened in Japan.
"Given the international
tension, the oil market did remarkably well not to rally several
dollars yesterday," oil broker PVM said in a report.
"Perhaps it was the U.S. oil inventory data which capped gains."
Moreover, a government report released Wednesday reminded that the oversupply persists, as U.S. crude inventories climbed by 4 million barrels to 457.9 million in the week to Sept. 25, more than expected.
