UPDATE 6-Oil recoups some Syria-related losses; focus switches to Iran
* U.S., France, Britain launched missiles on Syria
* Oil prices had climbed in run-up to the Syria strikes
* Funds managers hold record Brent futures and options (Updates throughout, adds comment changes dateline, previousLONDON)
By Jessica Resnick-Ault
NEW YORK, April 16 (Reuters) - Oil recovered some ground onMonday, but prices were still down on the day as investorconcern waned about escalating tensions in the Middle Eastfollowing air strikes on Syria over the weekend.
The United States, France and Britain launched 105 missileson Saturday, targeting what they said were three chemicalweapons facilities in Syria in retaliation for a suspectedpoison gas attack on April 7. urn:newsml:reuters.com:*:nL8N1RS0BR
Oil prices had risen nearly 10 percent in the run-up to thestrikes, as investors bulked up on assets, such as gold or U.S.Treasuries, that can shield against geopolitical risks.
"Some of the ease in Syria is the headline that is bringingit down," said Phil Streible, senior market strategist at RJOFutures in Chicago. Because the attacks were more surgical thananticipated in more extreme scenarios, the market has shruggedoff bullish factors, he said.
"It has got everything to possibly boost it: weak dollar,Syria, potential sanctions, White House uncertainty, Chinatrade," he said.
Brent crude oil futures LCOc1 were down 74 cents at $71.84a barrel by 11 a.m. EST [1700 GMT], having recovered from asession low of $71.11, while U.S. crude futures CLc1 were down75 cents at $66.64 a barrel.
"As far as developments in Syria are concerned, the markethas had a sigh of relief in the sense that there is noescalation, either diplomatically, or on the ground, followingthe intervention by the U.S., France and the UK," said BNPParibas global head of commodity market strategy HarryTchilinguirian.
"As a macro asset-allocator, if you want to hedge yourportfolio against geopolitical risk, your prime candidate isoil, especially if that risk is in the Middle East."
Although Syria itself is not a significant oil producer, thewider Middle East is the world's most important crude exporterand tension in the region tends to put oil markets on edge.
"Investors continued to worry about the impact of a widerconflict in the Middle East," ANZ bank said.
Fund managers hold more Brent futures and options than atany time since records began in 2011, according to data from theInterContinental Exchange. O/ICE
Investors have added to their bullish positions in Brent,which now equal nearly 640 million barrels of oil, in nine outof the last 10 months.
The next event on investors' radar is a deadline looming inMay by which U.S. President Donald Trump has threatened towithdraw the United States from a deal between Tehran and sixworld powers on Iran's nuclear restrictions, signed in 2015before he took office, unless Congress and European allies help"fix" it with a follow-up pact.
Even the imposition of unilateral sanctions by the U.S.government could hamper exports of oil from Iran, one of theworld's largest producers.
"Oil is still holding relatively well and the mid-MayIranian deadline is going to be a bit of a subject for the nextfour weeks," Petromatrix strategist Olivier Jakob said.
GRAPHIC: U.S. oil rig count https://reut.rs/2JJVaD3
(Additional reporting by Henning Gloystein and Roslan Khasawnehin Singapore and Amanda Cooper in LondonEditing by Marguerita Choy and Louise Heavens) ((Jessica.Resnick-Ault@TR.Com
; On Twitter: @JessicaRAult))