Crude oil prices exploded higher this week as U.S. officials’ rhetoric toward Syria grew increasingly bellicose.
By mid-week, U.S. military intervention in Syria appeared imminent, which caused traders to buy up crude oil on the fear that a greater conflict could ensue, threatening global oil supplies. The primary concern was that Iran could launch counterattacks against Israel or attempt to close the Strait of Hormuz, a narrow waterway through which 20 percent of global oil travels. These concerns pushed crude oil to $112.24 per barrel mid-week.
Later in the week, commitment to immediate intervention appeared to be waning as American ally France urged the U.S. to wait for United Nations inspectors to investigate reports of chemical warfare, while the British Parliament voted against military action. These setbacks caused an about-face in the crude oil market, which tumbled as low as $106.75 on midday Friday. As uncertainty abounds in the Middle East, many oil watchers expect continued volatility in prices, like this week’s $6.68 (6.3 percent) shift from high to low.
Petroleum volatility spread to the gasoline market as well, where prices rose four cents per gallon during the week.
Soybean prices started the week with a bang, climbing the exchange-maximum 70 cents per bushel during the day on Monday, eventually climbing to an eleven-month high at $14.09.
Beans rallied on a lack of rain, especially in the western half of the Midwest, where the plants need more moisture to fill their pods. Most farmers are finding the soybeans in the pods are much smaller than normal for this time of year due to this year’s late planting date, a factor that would decrease the overall size of this year’s harvest. By Friday, a little more rain was forecast, helping to drive prices back down to $13.55.