Oil prices ease after Syria air strikes

The US led Britain and France in strikes against alleged chemical weapons facilities in Syria, sparking condemnation from Russia and warnings of 'chaos' in international relations

Oil prices slid on Monday amid relief that US-led strikes on Syria did not provoke an escalation in the conflict, easing investor fears about the security of crude oil supply.

Russia holding back on any military riposte helped lift Wall Street, as did strong retail sales, but European equities closed lower as the region's key currencies strengthened against the dollar.

"The limited and targeted strikes in Syria that provoked no serious response from Russia were a relief to markets that were pricing in escalation," said Jasper Lawler, head of research at LCG.

The United States, Britain and France carried out attacks at the weekend on alleged chemical weapons facilities, in response to what they say was a toxic gas attack by the Russia-backed Assad regime a week before.

"We can understand why the oil price has tended to fall rather than gain today in response to the West's military strike against Syria," Commerzbank commodities analysts said in a note.

"After all, the tough response announced by Russia has failed to materialise," they said.

Crude prices had run up to highs not seen since the end of 2014 last week as tensions rose ahead of the attack in the tinderbox oil-rich Middle East region.

- Drawing the line -

"The strike on Syrian chemical locations over the weekend marks the end of the recent standoff," noted IG analyst Joshua Mahony. "Market realisation that this attack largely draws the line under the issue has brought about a sharp decline in oil prices," he said.

The commodities-heavy FTSE-100 in London slipped as oil prices slid, and shares in BP and Shell both fell.

Also weighing on the FTSE 100 index was a strong pound which hit the share prices of multinationals earning large amounts in other currencies.

"Even though investors have moved past the Syria missile strikes and are working on the basis that there will be no extended conflict or market-adverse retaliation, equity markets are struggling for direction," noted Interactive Investor analyst Rebecca O'Keeffe.

US stocks got a fillip from US retail sales rising for the first time in four months, with sentiment also boosted by Bank of America beating earnings estimates with first-quarter profits rising by a third to $6.5 billion.

- WPP tumbles -

British advertising and marketing group WPP topped the FTSE fallers after chief executive Martin Sorrell resigned over the weekend.

Sorrell's departure came 10 days after WPP launched an independent probe into allegations of his personal misconduct through the misuse of company assets.

The company, widely regarded as a bellwether for the global advertising industry, was around three percent lower in late trading, having earlier fallen by more than five percent.

"WPP has been losing ground in the advertising world recently, as traditional advertising is losing out to online and social media marketing," said CMC Markets analyst David Madden.

"Sir Martin was an integral part of WPP, and some market confidence has been lost now that he is no longer at the helm."

- Key figures around 1540 GMT -

Oil - Brent North Sea: DOWN 79 cents at $71.79 per barrel

Oil - West Texas Intermediate: DOWN 82 cents at $66.57

London - FTSE 100: DOWN 0.9 percent at 7,198.20 points (close)

Frankfurt - DAX 30: DOWN 0.4 percent at 12,391.41 (close)

Paris - CAC 40: DOWN 0.04 percent at 5,312.96 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,441.04

New York - Dow: UP 0.8 percent at 24,544.10

Tokyo - Nikkei 225: UP 0.3 percent at 21,835.53 (close)

Hong Kong - Hang Seng: DOWN 1.6 percent at 30,315.59 (close)

Shanghai - Composite: DOWN 1.5 percent at 3,110.65 (close)

Euro/dollar: UP at $1.2368 from $1.2331 at 2100 GMT

Dollar/yen: DOWN at 107.26 yen from 107.35

Pound/dollar: DOWN at $1.4326 from $1.4238