Brent crude oil rose to its highest in nearly a month on Monday after geopolitical worries overcame demand concerns and lifted crude prices. However, profit taking pushed the commodity downward to settle at $104.95 at 5:55 GMT on Tuesday morning.
An Israeli airstrike near Damascus is reported to have killed dozens of Syrian soldiers and heightened fears that the ongoing conflict in Syria could be spreading. However, Israeli officials downplayed their roll in the conflict, claiming the attack was not related to the Syrian civil war.
Instead, Israel claims it was attempting to stop Lebanese Hezbollah militants from obtaining Irainian missiles, which could be used against Israel if it makes good on threats to attack Iran's nuclear installations.
In any case, the weekend's events have kept a floor under Brent prices as the threat of supply interruption remains if the conflict spreads.
The Standard & Poor's 500 Index closed at a record high on Monday, which also lent support to Brent. Many investors saw the positive data as a glimmer of hope that the US could slowly be getting back on track.
According to Reuters, analysts at Morgan Stanley are expecting crude to increase in the second half of 2013. Analysts from the bank released a research note on Monday which forecast Brent prices hitting $110-$115 per barrel at the end of 2013.
In the near term, most see crude falling from its current level if the conflict in Syria doesn't escalate further; but the commodity is not likely to break the $100 barrier again.
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