Oil prices drop as fears about Syria strikes fallout wane

The Fed's Beige Book report on current economic conditions was released today. There's a lot of commentary from Fed contacts in both energy and oil-related services about the freefalling price of the commodity over the last month.

LONDON — Brent crude surged to a six-month high on Wednesday as western countries prepared to attack Syria, raising concerns over the security of oil supplies across the Middle East, which pumps a third of the world’s oil. The United States and its allies are readying for air strikes against the forces of President Bashar al-Assad, blamed for poison gas attacks last week. But the timing of any action was unclear.

Global markets breathed a sigh of relief on Monday after this weekend's Syrian airstrikes, with bond yields rising, the dollar lower, Asian and European stocks mixed, and US futures spiking, as investors assessed the prospect of escalating geopolitical tensions after a U.S.-led airstrike on Syria hit only 3 targets - instead of the rumored 8 - and with Russia failing to respond, fears of an imminent military conflict have been sharply ratcheted down, resulting in a generally bullish market reaction.

LONDON: Crude oil prices dropped on Monday as the dollar rose and on expectations that OPEC production would remain high, stoking worries of oversupply despite declining U.S. rig operations. The Organization of the Petroleum Exporting Countries (OPEC) pumped at a two-and-a-half year high of 31.22 million barrels of oil per day (bpd) in May, a Reuters monthly survey showed. The 12-member cartel meets in Vienna on Friday but is expected to maintain its current production policy, keeping the world oil market amply supplied for the foreseeable future.

Damascus (AFP) - Syria said Tuesday it had received sophisticated new arms from Russia, including warplanes, and deployed them against jihadists, as signs grew of a major shift in the country's four-year conflict.

"Israel is trying to divert attention from the defeat that it suffered in the face of the determination of the hero prisoner, Mohammed Allan."

The biggest retreat from U.S. oil fields on record is showing signs of subsiding. Oil explorers sidelined 41 drilling rigs this week, the smallest drop in three weeks and down from the average 59-rig decline in February. The count has fallen for 15 straight weeks to 825, reaching the lowest level in more than five years, Baker Hughes Inc. said on its website Friday.

Schlumberger Ltd. will pay US$1.7-billion for a stake in Eurasia Drilling Co., a bet by the world’s largest oilfield services provider that economic sanctions won’t hold back Russia’s energy industry. Schlumberger, based in Houston and Paris, will pay US$22 a share for a 46.45%  holding in London-traded Eurasia Drilling, according to a statement Tuesday. Schlumberger has an option to buy the rest of the company’s shares three years after the deal closes.