Belfast Telegraph

Oil hits high as concerns grow over Syria attack

By Russell Lynch

Crude oil hit a six-month high and shares have fallen again as growing fears of a Western attack on Syria and upheaval in the Middle East sent investors scurrying for cover.

Brent crude traded above $117 a barrel and US crude hit a two-year high.

The heightened market tensions pushed cash into gold and out of the risky Indian rupee.

Gold rallied to three-and-a-half-month highs above $1,430 an ounce as rising tensions over Syria sparked safe-haven demand.

"Short-term, the focus is likely to rest on what happens in the Middle East," Credit Suisse analyst Tom Kendall said.

"There is a degree of safe-haven demand from, in and around the Middle East, and with the move up in [the gold] price in the last couple of weeks, you've had something of the order of six million ounces of short-covering going through."

The rupee slumped to a record low, trading higher than 68 rupees to the dollar, and Indian shares tumbled on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.

European stock markets were all down for the second day running, but none by more than 1%.

"Investors are sort of battening down the hatches a bit. I get the sense this looks like a situation that is likely to be with us for a while," said Ric Spooner, chief market analyst at CMC Markets.

"One reason the market has started to fall is that people are thinking this may not be a one-off blip that will only last a week. The stakes have been raised by the use of chemical weapons."

Belfast Telegraph