Conflict-surge in oil prices fades on rig, labor figures

April 7 (UPI) -- An overnight surge in crude oil prices moderated in the hour before the start of U.S. trading Friday with rig counts and labor figures putting a lid on the rally.

Crude oil prices spiked overnight after the U.S. military struck Syrian targets using cruise missiles in response to a suspected chemical weapons attack.

"It is in this vital national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons," U.S. President Donald Trump said in a statement.

The strikes upset delicate geopolitical issues and alliances in the region. Russia, seen as an ally to Syrian President Bashar Assad, criticized U.S. military action and suspended an understanding aimed at ensuring operational flight safety in Syria.

Ole Hansen, the head of commodity strategy at SaxoBank, told UPI the airstrikes could potentially spill out of the direct line of the Syrian civil conflict and destabilize broader international relations. Crude oil prices increased more than 1 percent in the hours after the attack, but moderated by mid-morning.

"I do not expect this will signal a major change in the fundamental outlook," Hansen said.

Crude oil prices have moved noticeably higher this week on signs of market tightening. The price for Brent crude oil was up 0.13 percent about a half hour before start of trading in New York to $54.92 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.3 percent to $51.87 per barrel.

The rally in crude oil prices may be moderated as traders digest the latest figures from the U.S. Labor Department. The world's No. 1 economy added just 98,000 jobs in March and the number of long-term unemployed, those who haven't found work in 27 weeks or more, was relatively unchanged over the month.

Labor has been a bright spot in the U.S. economy for several months. A March report from the U.S. Commerce Department said fourth quarter growth in real gross domestic product was an annualized 2.1 percent, up from the previous estimate of 1.9 percent.

Elsewhere, North American exploration and production figures continue to improve on the back of higher crude oil prices. Spending on exploration and production waned last year when crude oil prices dropped below $30 per barrel. Data from oilfield services company Baker Hughes said North American activity increased from February and March.