Oil prices drop as vote on Syria strike postponed

PanARMENIAN.Net - The price of oil dropped Wednesday, Sept 11, after President Barack Obama said he asked U.S. lawmakers to postpone a vote authorizing the use of military force against Syria, the Associated Press reports.

Obama, in a televised speech to the nation late Tuesday, said he wanted to give Syria a chance to turn over its chemical weapons before he asks Congress for consent to intervene in the country's civil war.

Oil prices have been at elevated levels for two weeks following Obama's call for action against the government of Syrian President Bashar Assad in retaliation for what the White House says was a deadly chemical weapons attack against civilians last month.

Syria's surprise announcement Tuesday that it would accept a Russian plan to turn over its chemical weapons stockpile raised the possibility of a resolution to the standoff between Obama and Assad and lowered tensions in oil markets.

Syria is not a major oil producer, but oil traders say the possibility of a wider conflict could interrupt production and shipping routes in the Middle East and cause prices to rise.

Benchmark oil for October delivery fell 33 cents to $107.06 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $2.13, or 1.9 percent, to close at $107.39 a barrel on the Nymex on Tuesday.

Brent, the benchmark for international crudes, rose 18 cents to $111.43 per barrel on the ICE Futures exchange in London.

"President Obama now seems to be walking away from his earlier hard stance on Syria, and this means that we are likely to see the recent risk premium on crude dissolve," Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

Syria's promise "eased concerns that the conflict will escalate and disrupt oil shipments from the Middle East", Malaysian banking group CIMB said in a note.

Analysts said investors will also be watching the latest U.S. crude stockpiles data to be released Wednesday for clues about demand in the world's top oil consumer.