NEW YORK: Brent crude oil fell yesterday, putting it on track for its steepest weekly decline since June, as investors grew less worried about a military strike on Syria as Russia and the United States agreed on a new push to negotiate an end to that country’s civil war.
US crude also fell after weak consumer confidence and retail sales data pointed toward slower growth during the third quarter in the world’s largest oil consumer.
Brent was down about 3.5 percent since last Friday. The international benchmark has slid about $5 a barrel since the end of August, when it jumped above $117 amid worries that a possible US attack on Syria could lead to more violence in a region that pumps around a third of the world’s oil.
Tensions have eased this week, with US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov working to chart out a Moscow plan to dispose of Syrian President Bashar Al Assad’s chemical weapons.
“The Syrian talks are at a stalemate so that’s helping pull down prices, because there’s no imminence of an attack,” said John Kilduff, partner at Again Capital LLC in New York.
“And we’ve had some questionable data points. There’s a view that we’re going to get the tapering announcement next week from the Fed,” he said.
The Brent crude futures contract for October, which expired yesterday, fell 56 cents to $112.07 a barrel by 1.32pm EDT (1732 GMT), after earlier touching a session low of $111.60.
US crude shed 67 cents to $107.92 a barrel, after hitting a session low of $107.23.
Brent was on course for its first weekly decline in a month, its steepest since the week ending June 21.
Investors are focused on the US Federal Reserve’s policy meeting next week. The US central bank is expected to begin tapering, or reducing monthly bond purchases. Weak U.S. data has analysts expecting less of a reduction than once thought.
“I think the market’s going to languish here, until we start to get some insight into what the Fed’s intentions are going to be,” said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
“Right now everything seems to be up in the air, and the market’s just wavering back and forth until it finds its signal to go on a new drive.”
Although global oil markets remain tight, with more than 1 million barrels per day (bpd) of Libyan crude oil exports unavailable due to civil unrest and strikes, investors expect supplies to improve over the next few months.