Oil prices climb on geopolitical fears, US data

Oil prices surged on Friday helped by a rise in Middle East worries, after Washington said it would provide military support to Syria's rebels and Iran went to the polls to elect a new president, AFP reports. Firm if not stellar US economic data also helped the market, analysts said. New York's main contract, WTI crude for July delivery, added $1.16 from Thursday to $97.85 a barrel, its best level since the end of January. In London, Brent North Sea crude for August delivery rose 98 cents to $105.93. Analysts said US data reported Thursday showing gains in US retail sales in May, especially for cars and trucks, and a fall in claims for unemployment insurance benefits, underpinned confidence in the growth of the US economy. "Crude prices have strengthened... as markets continued to digest the better-than-expected US retail and unemployment statistics," said analyst Myrto Sokou at the Sucden brokerage in London. "Retail sales boosted by car sales led to speculation that people might actually put gas into them," quipped Phil Flynn of the PRICE Futures Group. But much attention was on the Middle East, after US officials said they had evidence of the use of chemical weapons by forces backing Syrian leader Bashar al-Assad. The officials said the United States was ready to increase support for the Syrian rebels, raising worries of an escalation of the conflict. "The market may also be padding the geopolitical risk premium given the US decision to provide support for Syrian rebels, with the market fearing a broadening of the conflict rather than containment," said Timothy Evans of Citi Futures. "Iran's presidential election could be considered a risk factor as well, although it may take a runoff vote next week to determine the outcome and policy is unlikely to change anyway, with supreme leader Ayatollah Ali Khamenei still firmly in charge."