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Oil prices surge 2% after US missile strike in Syria

Oil prices have surged more than 2 percent following the missile strike of US at an airbase in Syria.

Oil prices have surged more than 2 percent following the missile strike of US at an airbase in Syria, shaking the global markets and raising concerns of spread of conflict in the oil-rich region.

The United States fired on Friday morning dozens of cruise missiles on al-Shayrat air base in Homs province in western Syria in response to this week's alleged chemical attack in the Arab country that it has blamed on the government.  

US crude oil hit its highest level in a month, leaving it trading up 1.2% at around $52.30 a barrel. Crude had suffered a sharp drop in early March.

European markets showed slight falls, yet other asset classes such as Gold prices were up 1.25% at $1,253.75 an ounce as a result of the attacks.

The dollar fell slightly against many Asian currencies, including the yen, however, it gained ground against the Euro.

According to analysts, the market impact of the attacks is likely to be short-lived, since the US had described it as a “one-off.”

“It was a knee-jerk reaction because markets are starting to come back a little, as it doesn't seem like there will be further retaliation coming,” said Christoffer Moltke-Leth at Saxo Capital Markets in Singapore.

Trump ordered the strike just a day after he pointed the finger at Syrian President Bashar al-Assad for the deadly attack which killed at least 70 people in the town of Khan Shaykhun in Idlib.

The foreign-sponsored militants active in the area and some Western officials blamed the attack on the Syrian military whereas Damascus rejected the allegation, insisting it “has never used them [chemical weapons], anytime, anywhere, and will not do so in the future.”

The United States and its allies have repeatedly used chemical weapons as a pretext to pressure the Syrian government. Damascus volunteered to destroy its chemical stockpile in 2014 following a poisonous attack outside the capital. 

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