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Oil recoups some Syria-related losses; focus switches to Iran

Reuters  |  LONDON 

By Cooper

LONDON (Reuters) - recovered some ground on Monday, but prices were still down on the day as investor concern waned about escalating tensions in the following air strikes on over the weekend.

The United States, and Britain launched 105 missiles on Saturday, targeting what they said were three in in retaliation for a on April 7.

The price had risen nearly 10 percent in the run-up to the strikes, as investors bulked up on assets, such as gold or U.S. Treasuries, that can shield against geopolitical risks.

By 1318 GMT on Monday, Brent futures were down 51 cents on the day at $72.07 a barrel, having recovered from a session low of $71.11, while U.S. crude futures were down 54 cents at $66.85 a barrel.

"As far as developments in are concerned, the market has had a sigh of relief in the sense that there is no escalation, either diplomatically, or on the ground, following the intervention by the U.S., and the UK," said

"As a macro asset-allocator, if you want to hedge your portfolio against geopolitical risk, your prime candidate is oil, especially if that risk is in the "

Although itself is not a significant producer, the wider is the world's most important crude exporter and tension in the region tends to put markets on edge.

"Investors continued to worry about the impact of a wider conflict in the Middle East," said.

Fund managers hold more Brent futures and options than at any time since records began in 2011, according to data from the InterContinental Exchange. [O/ICE]

Investors have added to their bullish positions in Brent, which now equal nearly 640 million barrels of oil, in nine out of the last 10 months.

The next event on investors' radar is a deadline looming in May by which Trump has threatened to withdraw the from a deal between and six world powers on Iran's nuclear restrictions, signed in 2015 before he took office, unless and European allies help "fix" it with a follow-up pact.

Even the imposition of unilateral sanctions by the could hamper exports of from Iran, one of the world's largest producers.

"is still holding relatively well and the mid-May Iranian deadline is going to be a bit of a subject for the next four weeks," said.

(Additional reporting by and in Singapore; Editing by and Louise Heavens)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, April 16 2018. 23:19 IST