NEW YORK: Oil recovered some ground on Mon­day, but prices were still down on the day as investor concern waned about escalating tensions in the Middle East following air strikes on Syria over the weekend.

The United States, France and Britain launched 105 missiles on Saturday, targeting what they said were three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack on April 7.

Oil prices had risen nearly 10 per cent in the run-up to the strikes, as investors bulked up on assets, such as gold or US Treasuries, that can shield against geopolitical risks.

“Some of the ease in Syria is the headline that is bringing it down,” said Phil Streible, senior market strategist at RJO Futures in Chicago. Because the attacks were more surgical than anticipated in more extreme scenarios, the market has shrugged off bullish factors, he said.

“It has got everything to possibly boost it: weak dollar, Syria, potential sanctions, White House uncertainty, China trade,” he said.

Brent crude oil futures were down 74 cents at $71.84 a barrel by 11am EST [1700 GMT], having recovered from a session low of $71.11, while US crude futures were down 75 cents at $66.64 a barrel.

“As far as developments in Syria are concerned, the market has had a sigh of relief in the sense that there is no escalation, either diplomatically, or on the ground, following the intervention by the US, France and the UK,” said BNP Paribas global head of commodity market strategy Harry Tchilinguirian.

“As a macro asset-allocator, if you want to hedge your portfolio against geopolitical risk, your prime candidate is oil, especially if that risk is in the Middle East.”

Published in Dawn, April 17th, 2018