150 dollars per barrel is still a spread of panic for now

The prices of crude oil barrels in international markets were pressured today by the announcement from the United Kingdom that it would not participate in military action against Syria, which has dampened concerns about supply from the Middle East.

On the London market, the price of crude oil remained almost unchanged compared to yesterday’s market close at $115.01, after briefly dropping to just $113.63. On the American market, barrels were traded at a price 80 cents lower, at $108, and briefly fell to just $106.75.

The British Parliament rejected Prime Minister David Cameron’s proposal last night that could have resulted in the United Kingdom participating in military action in Syria. The outcome of the vote will hinder the efforts of allied countries led by the United States to punish the Syrian regime for using chemical weapons against civilians.

“The pendulum is now swinging back towards reduced risks,” stated Eugen Weinberg from Germany’s Commerzbank. “The market has priced in excessive risk premiums, so they are now falling, and I think they will go even lower,” he said.

He deemed the assessments of some investment banks that oil prices could reach even higher levels as reckless.

“The assessments that prices could reach $150 have only unfoundedly stoked fear. This is an unnecessary spread of panic,” he added.

French bank Societe Generale announced on Wednesday that oil prices are likely to rise towards $125 and could briefly reach $150 per barrel if the West launches an airstrike on Syria and the conflict spreads to the rest of the Middle East.

“If the conflict spreads to the region and results in a significant disruption in supply from Iraq or other countries, the price of a barrel of oil could briefly spike to $150,” said Michael Wittner, an analyst at the French bank, on Wednesday.

The Organization of the Petroleum Exporting Countries (OPEC) announced today on its website that the price of its reference basket of oil was $112.8 on Wednesday, which means it was 55 cents higher than the previous trading day.