Oil prices rebound on Middle East tensions

Oil prices rebounded on Monday from sharp pre-weekend losses, as investors tracked Middle East tensions. Brent North Sea crude for delivery in December gained 49 cents to $110.63 a barrel in London midday trade. New York's main contract, light sweet crude for November, grew 54 cents to $90.59 a barrel. "The ongoing fighting in Syria and Lebanon provide some support to the oil market giving upside momentum, while investors try to remain cautious about the Middle East crisis," said Sucden Financial analyst Jack Pollard. Hopes of a truce being implemented in war-torn Syria during this week's Muslim Eid holidays are "slim," the Arab League said on Monday, as heavy fighting rocked Damascus and the northern city of Aleppo. UN-Arab League peace envoy Lakhdar Brahimi had on Sunday indicated a favourable response to his appeal to both sides of the Syrian conflict to observe a truce during the four-day Eid al-Adha holiday, which begins on Friday. Brahimi has visited several countries with influence in the Syrian conflict over the past week, including Lebanon and Iran, warning that the violence could spread and set the entire oil-rich region ablaze. Such fears were compounded when a massive car bomb exploded on Friday in Beirut, killing three people including a senior police intelligence chief linked to the anti-Damascus camp in Lebanon, General Wissam al-Hassan. Lebanon, which was under Syrian military and political domination for 30 years until 2005, has been divided over the conflict in Syria and has experienced violence between supporters and opponents of the regime of President Bashar al-Assad. Oil prices meanwhile tumbled on Friday to close down more than two dollars a barrel in London and New York as traders worried about demand following a batch of poor earnings reports from US companies and an EU crisis summit that disappointed. Prices also were hit by a stronger dollar; dollar-priced crude tends to curb demand from buyers using weaker currencies.