Coverage: Oil prices hit three-year high

Oil prices hit new 2018 highs — and a three-year high — as missile strikes on top crude exporter Saudi Arabia added to the market’s worries about escalating conflict between the United States and Russia in Syria.

Tom DiChristopher of CNBC.com had the news:

Brent, the benchmark for international oil prices, earlier climbed to its highest level in more than three years after President Donald Trumpearlier warned Russia to “Get ready” for a U.S. missile attack on Syria, whose government Moscow has backed during its seven-year civil war.

The threat came after the Russian ambassador to Lebanon said his nation’s military would intercept American missiles and potentially target the U.S. craft that fired them. The potential American strike follows a suspected chemical attack on the rebel-held city of Douma, allegedly by forces loyal to Syrian President Bashar Assad.

U.S. West Texas Intermediate crude ended Wednesday’s session up $1.31, or 2 percent, at $66.70, its best settle since Dec. 3 2014. During the session, WTI rose as high as $67.45, a peak going back to Dec. 4, 2014, when it touched $68.22.

Brent crude was at $72 a barrel, up 96 cents, or 1.4 percent, shortly before its settlement. The contract earlier rose to $73.09, the highest level since Nov. 28, 2014, when it hit $73.41.

Myra Saefong and Mark DeCambre of MarketWatch.com reported the U.S. also reported a bigger-than-expected weekly rise in domestic crude supplies:

News reports that Saudi Arabia intercepted a missile over Riyadh prompted a steeper rise in prices shortly after a U.S. government report revealed a bigger-than-expected weekly rise in domestic crude supplies.

May West Texas Intermediate crude rose $1.31, or 2%, to settle at $66.82 a barrel on the New York Mercantile Exchange—the highest settlement for the U.S. benchmark since Dec. 3, 2014, according to FactSet data.

June Brent crude, the global oil benchmark, added $1.02, or 1.4%, to $72.06 a barrel on London’s ICE Futures exchange, settling at its highest since Dec. 1, 2014. It had also finished at a more than three-year high on Tuesday.

The brisk rally in crude prices came as the administration has been working to marshal international support for a possible military strike against Syrian President Bashar al-Assad for an alleged chemical-weapons attack. Renewed conflict in the Middle East, which could also draw a response from Syrian ally Russia, could hinder oil output and weigh down global supply, analysts say.

Tsvetana Paraskova of Oilprice.com reported that ExxonMobil and Chevron could benefit from the higher prices:

Exxon and Chevron fared very differently during and after the downturn, and both recently outlined their respective strategies for the medium to long term¬—the strategies differ greatly.

Exxon bets on aggressive investment and growth to double earnings and cash flow by 2025, while Chevron continues to stick to capital discipline, cost cuts, and portfolio high-grading.

With its plan through 2025, Exxon is straying from the Big Oil pack, all of which still consider capital discipline as a top priority, alongside shareholder returns.

Chevron’s strategy of capex discipline is closer to that of the other supermajors, some of which already announced they would start buying back shares. Chevron hinted at this as chairman and CEO Michael K. Wirth said, “As we generate surplus cash, we would expect to be in a position to resume our share repurchase program.”