Oil prices drop amid US trade data, Syria

4th September 2013, Comments 0 comments

Oil prices fell on Wednesday as traders mulled an expansion to the US trade deficit and assessed the risk of Middle East supply disruptions amid fears of a possible US-led military strike on Syria.

Brent North Sea crude for delivery in October dropped 32 cents to stand at $115.36 a barrel in late London deals.

New York's main contract, West Texas Intermediate for October, slid 79 cents to $107.75.

"The deterioration in the August (US) trade data has no doubt acted as a bit of a drag here," said Michael Hewson, senior analyst at traders CMC Markets UK.

The US trade deficit expanded more than expected in July as exports fell and imports surged higher, including record imports of foreign cars and trucks, the Commerce Department reported on Wednesday.

The trade gap rose to $39.1 billion, from a revised $34.5 billion in June, and was $4.3 billion smaller than in July 2012.

Analysts on average had forecast a smaller increase in the deficit, to $38.2 billion.

All eyes were also on Syria as US lawmakers rally behind President Barack Obama's plan to launch military strikes against the country over a suspected poison gas attack outside Damascus that killed hundreds.

"Syria may not be a major oil producer but a military intervention in Syria could spread across the Middle East," Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said in a note to clients.

Investors are concerned that US intervention could lead to a wider conflict in the politically volatile Middle East, a key source of the world's crude oil supplies.

New York crude futures last week struck two-year highs over Syria concerns.

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© 2013 AFP

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