Crude Oil Surges On Supply Concerns; Ends Above $109

(RTTNews) - U.S. crude oil surged nearly three percent to end at a six-month high Tuesday, due mainly on concerns over the geopolitical tensions brewing in Syria with reports that the U.S. and its allies may be considering military intervention, fueling fears the trouble could spread across the region and disrupt oil supplies from the Middle East.

The U.S. has accused the Syrian government of trying to cover up the chemical weapons attack in a rebel stronghold near Damascus last week. The Obama administration will be making an informed decision on how to respond after consulting with its allies and the Congress. Secretary of State John Kerry blamed the Assad regime for the attack against civilians, and said the use of chemical weapons was inexcusable and undeniable.

With some downbeat macroeconomic data out of the U.S., investors also anticipate the Federal Reserve to continue to maintain its quantitative easing measures intact for the near future.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, soared $3.09 or 2.9 percent to close at $109.01 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for October delivery scaled a high of $109.32 a barrel intraday and a low of $105.88.

Yesterday, oil settled lower on some weaker than expected U.S. durable goods data for July, with the dollar trading higher against a basket of major currencies. Nonetheless, renewed hopes the Federal Reserve will maintain its bond-buying program supported prices.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.16 on Tuesday, down from 81.39 late Monday in North American trade. The dollar scaled a high of 81.57 intraday and a low of 81.13.

The euro traded higher against the dollar at $1.3387 on Tuesday, as compared to $1.3369 late Monday in North America. The euro scaled a high of $1.3400 intraday and a low of $1.3324.

In economic news from the U.S., a report released by Standard & Poor's revealed that the S&P/Case-Shiller 20-City Composite Home Price Index rose by a seasonally adjusted 0.9 percent in June after rising by 1.0 percent in May. Economists had been expecting the index to show another 1.0 percent increase.

Separately, the Conference Board said its consumer confidence index edged up to 81.5 in August from an upwardly revised 81.0 in July. The increase came as a surprise to economists, who had expected the index to dip to 78.0 from the 80.3 originally reported for the previous month.

From the eurozone, German business confidence improved more-than-expected to 107.5 in August, reports said citing survey results from the Ifo Institute. Economists had forecast the index to rise to 107 in August from the originally estimated level of 106.2 in July. Similarly, current assessment among survey participants climbed to 112 from 110.1. It was forecast to rise moderately to 111.

Later today, the American Petroleum Institute will release its U.S. crude oil inventories report for the week ended August 23.