US oil price ends flat after surge

New York oil prices surged to a nine-month high Monday sparked by Middle East worries before pulling back to end flat for the day. With Syria dominating the start of the Group of Eight (G8) meeting of world leaders in Northern Ireland, the oil market was volatile. At the end of New York trade, the main contract, West Texas Intermediate crude for delivery in August, reached $98.74 per barrel, a level last seen in September 2012, before easing back to $97.77, down 8 cents from Friday's close. In London, Brent North Sea crude fell 46 cents to $105.47, but only after having jumped to $106.67 earlier in the day. "Fears that Western intervention in Syria could increase the risks of a broader Middle East conflict have already put some upward pressure on the price of Brent crude," said Capital Economics analyst Julian Jessop. "However, even if tensions do continue to rise -- which all the major players would want to avoid -- we would expect any fallout for global oil markets to be more than offset by the prospect of releases from the vast strategic reserves held by the US and its allies." "Syria is not a major oil producing country, yet the potential for spillages into neighboring countries has spooked the markets somewhat," added analyst Joshua Mahony at traders Alpari. Prices had also advanced on Friday after US officials said they had evidence of the use of chemical weapons by forces backing Syrian President Bashar al-Assad and signaled that Washington could begin arming the opposition. "The oil price is currently being driven primarily by geopolitical aspects," said Commerzbank analyst Carsten Fritsch. "The decision of the US to supply arms to the rebels in Syria threatens finally to turn the civil war in Syria into a proxy war between the world powers, given that Russia is providing military support to the Assad regime."