Oil prices, which have shot up in recent days over the threat of a United States strike against Syria, fell below US$109 a barrel Tuesday after Damascus reacted favourably to a proposal to turn over its chemical weapons.
Oil prices dropped below US$109 a barrel after Damascus reacted favourably to a proposal to turn over its chemical weapons. (AP photo)
Benchmark oil for October delivery fell US$1.16 per barrel to $108.36 at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.01 to close at $109.52 a barrel on the Nymex on Monday.
Oil prices have risen sharply in recent days following US President Barack Obama's call for military action against the government of Syrian President Bashar Assad in retaliation for what the White House says was a chemical weapons attack against civilians.
But on Monday, there was reason to hope for a diplomatic solution when Syria's foreign minister welcomed a suggestion to move all the country's chemical weapons under international control. Analysts said it could also hurt Obama's attempts at gaining congressional support for military intervention.
"Backed by the United Nations, Russia is arranging for Syria to turn over its chemical weapons to avert a confrontation," said Vishnu Varathan of Mizuho Bank Ltd in Singapore. "By deflecting the approaching strike, Russia has also created greater uncertainty in the US Congress on the vote over Syria though the US is still leaning towards a strike." Obama plans to address the nation from the White House on Tuesday about Syria.
Brent, the benchmark for international crudes, dropped $1.03 to $112.69 per barrel on the ICE Futures exchange in London.