Oil well pumps are seen in the Rmeilane oil field in Syria's northeastern Hasakeh province
London - AFP
Global oil prices hit multi-month peaks Friday on the back of the struggling US dollar and increasing geopolitical turmoil in the crude-rich Middle East, dealers said.
Brent North Sea crude for delivery in November added 56 cents to stand at $53.61 per barrel just after midday in London, having earlier hit $54 -- the highest since late August.
US benchmark West Texas Intermediate for delivery in November won 96 cents to $50.39 per barrel compared with Thursday's close. The contract had earlier touched a 2.5-month peak at $50.58.
"Oil prices are continuing to rise, as they have been in recent days," said Commerzbank analyst Carsten Fritsch.
"Increased risk appetite coupled with a weaker US dollar is giving tailwind to the oil prices.
"In addition, some market observers have made optimistic remarks about the future development of the market."
The flagging greenback makes dollar-priced oil cheaper for buyers using stronger currencies, which tends to stimulate demand and prices.
This week, meanwhile, Russia continued to launch airstrikes in Syria in support of President Bashar al-Assad.
"Russia's military intervention in support of Assad has finally turned the war in Syria into a proxy war between the world powers, which significantly increases the geopolitical risks," added Fritsch.
Moscow says it is targeting Islamic State (IS) jihadists, but British intelligence forces claim that only one in 20 Russian air strikes was hitting the extremist group.
"Russia’s controversial and apparently imprecise bombardment of IS targets in Syria is further heightening the geopolitical risks in the Middle East region and this is also helping to push oil prices higher," noted analyst Fawad Razaqzada at traders Gain Capital.
- Demand hopes -
Crude futures also climbed Friday on hopes that increasing demand and declining US crude production would ease a supply glut that has depressed the market for more than a year.
The two main crude contracts hit a six-year low during the April-September quarter owing to a fears about an oversupply, China's economic slowdown and expectations for a US interest rate rise.
However, they have surged recently as the US Federal Reserve shows signs it will hold off hiking rates -- a rise would strengthen the greenback, making dollar-priced oil more expensive -- while recent data from Beijing has also soothed nerves.
And on Thursday Abdalla Salem El-Badri, secretary-general of the Organization of the Petroleum Exporting Countries (OPEC), said global demand is expected to rise more than projected this year, and next would see a further increase supported by "improvement in global economic activities".
WTI is up by about 31 percent and Brent over 25 percent higher after hitting more than six-year lows in late August.
Daniel Ang, an investment analyst with Phillip Futures in Singapore, said: "Prices have stayed low for a long time and this momentum that we're currently seeing comes in part from technical buying.
"On a more fundamental note, it also seems that the market has caught on (about) the decline in US crude production," he said.
Ang cited data from the US Energy Information Administration showing US output has declined from 9.6 million barrels per day in early July to around 9.2 million last week.
"If US crude production continues to fall, we could see the bullish momentum building up."