Oil prices rise on Mideast tensions

Oil prices rose Monday amid rumors of an attack on Syria's embattled leader and as Tropical Storm Ernesto appeared likely to grow into a hurricane that could disrupt Gulf of Mexico oil operations. New York's main contract, West Texas Intermediate (WTI) light sweet crude for September, finished trade at $92.20 a barrel, up 80 cents from Friday's closing price. Brent North Sea crude for delivery in September added 61 cents to settle at $109.55 a barrel in London trade. In the Caribbean, Tropical Storm Ernesto picked up strength and was expected to reach hurricane force later in the day, threatening the coasts of Belize and Mexico, US weather forecasters said. The Miami-based National Hurricane Center (NHC) said Ernesto was packing winds of 65 miles (105 kilometers) per hour as it powered across the Caribbean toward Central America. The center's map for the expected path of the storm had it directly headed for Mexico's key offshore oil fields. Phil Flynn at Price Futures Group said that traders were also watching storms covering the eastern coast of Florida. "It is an unorganized band of storms right now that traders are watching because this little band of storms could slow imports into the Gulf of Mexico," Flynn said. Geopolitical tensions in the Middle East helped to extend the gains. After opening lower, WTI shot higher on rumors of an attack against Syrian President Bashar al-Assad, which renewed fears of escalating violence in the oil-producing country, GFT Markets analyst Fawad Razaqzada said. The 17-month uprising against Assad hit his inner circle as Syria's prime minister, Riad Hijab, announced Sunday he was joining the rebels. A blast in southeastern Turkey interrupted oil flow from Iraq, with Kurdish rebels suspected to be behind the explosions, Turkish and Iraqi authorities said Monday. Iraq's North Oil Company will switch to pumping through a second pipeline, and exports from Ceyhan are to continue using reserves of oil there, he said.