NEW YORK: Oil prices slid more than $2 a barrel yesterday as Syria accepted a Russian proposal to give up its chemical weapons, making investors less nervous about the potential for US military strikes against Damascus.
Brent tumbled toward its largest two-day drop since June after Russia said it was working with Syria on an “effective, clear, concrete” plan to put Syria’s chemical weapons under international control.
The potential diplomatic breakthrough put the brakes on a planned vote in the US Congress on the authorisation of military force as lawmakers and the administration sought more time to assess Russia’s proposal to put Syria’s chemical weapons under international control.
“The market is in the process of removing the risk premium that Syria attributed to it,” said Andy Lebow,
Vice-President at Jefferies Bache in New York. “The market’s assessing less of a probability of any military action, given the diplomacy.”
Brent for October delivery fell $2.86 to $110.86 per barrel by 1.20pm EDT (1720 GMT) after sliding more than $3 to a session low of $110.59, its weakest level since August 26.
US. crude fell $2.66 to $106.86 after also losing more than $3 to hit a session low of $106.39.
Investors also were encouraged that oil exports from Lybia may pick up soon. On Monday, the head of the Libyan government energy committee said a group tasked with resolving that country’s oil paralysis will brief General National Congress with proposals on how to end the confrontation.
The recent slide in oil prices has eroded gains made on worries that a possible US-led military strike against Syria might disrupt oil supplies from the Middle East. Late last month, Brent climbed to six-month peaks above $117 and West Texas Intermediate (WTI) hit a 28-month high of $112.24.