Shale revolution, economic triggers and fundamentals have largely been driving international oil prices since two years. Geopolitics seemed to have taken a backseat all this while, but it now appears to be making a comeback to dictate where oil prices will go and settle in the medium term. The sudden US missile strike on Syria sent the oil prices soaring to a one month high at $56/barrel.

To top things off, Libya is not producing as much oil, as one of its largest oilfields was shut earlier this week, sending a fresh wave of bullish bias across the market. Recall that Syria is not a huge oil producer like some of its Middle East neighbours, and the direct impact on production is insignificant. It is the knee-jerk reaction that has added fuel to the bullish rally.

Analysts have started to price in the geopolitical premium in oil once again, which was seen missing in the last two years. The idea that the attacks on Syria may not just have been a one-off event, pundits have started calling for oil prices to settle in at $60/bbl without accounting for any other fundamental change.

On the other hand, Opec members seem to be complying well enough to retreat oil bears and pump in the bullish sentiment. For the first time in over six weeks, the hedge fund managers on the Wall Street boosted net long bets on crude oil futures. The market seems to be in consensus that the Opec deal will be further extended, with possibly more cuts promised, and greater compliance from smaller members.

The US refineries are also coming out of the refinery maintenance season simultaneously. And that should ease a few nerves in terms of drawing the record high level of US crude inventories. All the major oil forecasting agencies including the likes of EIA, have predicted global oil demand to pick up pace from the sluggish levels of yesteryears.