Brent may hit $150 if Syria impacts Iraq, SocGen warns

Brent crude oil prices may touch USD 150 a barrel if military action against Syria sparks a broader regional spill-over and causes supply disruptions in major producers like Iraq, Societe Generale warned.

Under such a scenario, the French bank classified a "significant supply disruption in Iraq or elsewhere" as affecting between 500,000 to two million barrels a day. "Brent could spike briefly to USD 150" if this materializes, said Michael Wittner, Global Head of Oil research at Societe Generale. In the more immediate term, Brent could gain another USD 5 to 10 a barrel, surging to as high as USD 125 in the days ahead "either in anticipation of the attack or in reaction to the headlines that an attack had started," Wittner said. However, demand destruction caused by high prices, spare capacity in Saudi Arabia and the availability of emergency stockpiles held by major consumers will ensure any Syria-related oil price spikes are temporary, he added. Major energy consuming countries under the IEA (International Energy Agency) "would be particularly concerned with protecting the fragile economic recovery, which has only recently been gathering momentum in an apparently sustainable fashion." Brent crude prices rose more than USD 2 on Wednesday to trade as much as USD 117.13, highs not seen since February this year.