Oil Edges Higher as Traders Weigh Fallout From Syrian Upheaval

(Bloomberg) -- Oil edged higher as the market weighed the fallout from the toppling of the Syrian government, which has sent shockwaves through the Middle East and dealt a blow to longtime backers Russia and Iran.

Brent rose toward $72 a barrel and Texas Intermediate was above $67. The fall of Bashar Al-Assad’s regime has created a power vacuum, with multiple groups vying for control, raising the prospect of more violence. Memories of Libya and Iraq loom large in the region, where entrenched rulers were swept aside only for the countries to descend into deeper turmoil.

“Markets are largely pricing that the tensions in Syria will remain contained within its own space and the risks of a wider oil supply disruption remain low,” said Jun Rong Yeap, a market strategist at IG Asia Pte in Singapore.

Crude has been confined to a tight range since mid-October, with bullish geopolitical developments in the Middle East and Ukraine countered by weak Chinese demand and ample supply. The market is facing a glut next year, meaning there is little room for a significant output boost from OPEC+.

Saudi Aramco, meanwhile, cut its oil prices to Asia for January after OPEC+ further delayed a resumption of idled production, underscoring the weak market outlook. The state producer also reduced prices for north-west Europe and the Mediterranean, while leaving those for North America unchanged.

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