Oil lower as fears of Syria strike ease
Oil prices dipped in Asian trade Tuesday as fears of a possible US-led strike on Syria eased, with the United States appearing open to a Russia plan for Damascus to give up its chemical weapons.
New York's main contract, West Texas Intermediate for delivery in October, dipped $1.19 to $108.33 in afternoon trade, while Brent North Sea crude for October fell $1.02 to $112.70.
Russia on Monday called for Syria "to place its chemical weapons under international control and then to have them destroyed", in a bid to avoid a US attack on the Assad regime for its alleged use of chemical weapons on its own people.
The proposal was greeted by US President Barack Obama as a "significant breakthrough", although he did not discount the option of military intervention.
The US Senate also announced Monday that it would be delaying a key vote on authorising the use of force in Syria to let Obama to publicly address the issue.
Crude prices have consolidated on the diminishing threat of an attack against Syria, said Kelly Teoh, market strategist at IG Markets in Singapore, in a note.
She said the possibility has gone "from highly possible from a week ago to less likely".
Prices are now well down from the multi-month highs seen last month when dealers expected the US and its allies to launch a strike on Syria, which analysts fear could lead to a wider conflict in the oil-rich Middle East.
Tight market conditions have also eased with the gradual recovery of crude production levels in Libya.
Libyan oil exports plunged more than 70 percent in August after protesters, including policemen and border guards, forced export terminals to shut over demands for back pay.
Sliman Qajam, a member of the Libyan parliament's energy committee, said Monday that the country's production has rebounded to 600,000 barrels a day, and all export terminals will be open by the middle of next week.