BP Holdings

bp holdings, Crude Rises to 18-Month High on Syria Tension

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West Texas Intermediate crude rose to the highest level in 18 months on speculation that tension in Syria will disrupt Middle East supplies.

Prices gained 2.9 percent as Foreign Minister Walid al-Muallem said that Syria’s defenses will “surprise” the world should the U.S. and its allies attempt military strikes. Western powers told the Syrian opposition to expect a strike against President Bashar al-Assad’s forces within days, Reuters reported, citing sources who attended a meeting.

“The geopolitical tension in Syria certainly escalated one notch higher and it’s a significant notch,” said Harry Tchilinguirian, BNP Paribas SA’s London-based head of commodity markets strategy. “It’s the implication of what a broader conflict in Syria would mean to key suppliers in that region. The market simply positioned itself long and waited for the next turn of events.”

WTI for October delivery climbed $3.09 to $109.01 a barrel on the New York Mercantile Exchange. It was the highest settlement since Feb. 24, 2012, and the largest percentage gain since May 2. Trading was 20 percent above the 100-day average for the time of day at 2:38 p.m.

Prices were little changed after the American Petroleum Institute reported U.S. crude inventories increased 2.47 million barrels last week. The October contract increased $2.97, or 2.8 percent, to $108.89 a barrel in electronic trading at 4:36 p.m. It traded at $108.91 before the report was released at 4:30 p.m.

‘Hearing Drums’

Brent for October settlement increased $3.63, or 3.3 percent, to $114.36 on the ICE Futures Europe exchange, a six-month high. Volume was 58 percent above the 100-day average. The European benchmark’s premium to WTI widened to $5.35 from $4.81.

Syria is “hearing the drums of war all around us,” al-Muallem said at a televised news conference in Damascus. The government hasn’t obstructed the United Nations probe into its alleg