New York crude hits two-week low

17th September 2013, Comments 0 comments

New York oil prices hit a two-week low point on Tuesday on fading Syria worries and ahead of the US Federal Reserve meeting, traders said.

New York's main contract, West Texas Intermediate for October, sank to $105.59 a barrel -- which was last witnessed in early September. It later stood at $106.27, down 32 cents from Monday's close.

Brent North Sea crude for delivery in November slid 49 cents to stand at $109.58 a barrel in London early afternoon deals.

The oil market had plunged by more than a dollar and a half on Monday, as investors reacted to the weekend deal between US Secretary of State John Kerry and his Russian counterpart Sergei Lavrov to dismantle Syria's chemical weapons by mid-2014.

In response, Brent had dived in intraday trade on Monday to strike $108.73 -- a level last seen on August 21.

"Brent oil prices have dropped below $110 per barrel for the first time this month with supply concerns from the Middle East easing back and anticipation that the US Federal Reserve will taper back its bond-buying process," said analyst Gary Hornby at energy consultancy Inenco.

Investors had feared that a possible US-led strike on Syria in retaliation for its alleged use of chemical weapons against its own people would spark a wider conflict in the crude-rich Middle East.

Meanwhile, western powers were poised on Tuesday to press their efforts for a UN resolution to rid Syria of chemical weapons, one day after a report by the world body describing a "chilling" sarin gas attack there.

United Nations experts, without assigning blame, said they had gathered "clear and convincing evidence" that surface-to-surface rockets took sarin gas into the opposition-held Damascus suburb of Ghouta on August 21.

The United States had threatened a military strike on Syria over the attack, which it said killed more than 1,400 people. Washington said responsibility for the attack rests squarely with the regime of President Bashar al-Assad.

"Crude oil prices fell after a Russia-United States agreement was established to gather and destroy Syria's chemical weapons," Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said in a note.

"This helped to ease investor (concerns) as the risk premium attached to possible US military intervention in Syria is now being removed," she said.

Elsewhere, traders are also awaiting the outcome of a two-day monetary policy gathering of the US Federal Reserve.

The policymakers are widely expected to announce the start of a pull-back of the central bank's massive asset-purchase programme, known as quantitative easing (QE). The meeting concludes Thursday.

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© 2013 AFP

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