Oil futures prices reached their lowest level in 3 weeks with the Sept. 16 closing while the US and Russia agreed to terms under which Syria is expected to submit chemical weapons to international officials, reducing the likelihood of a military strike and possible disruption to Middle Eastern crude supplies.
Crude oil prices have been volatile since Aug. 21 when more than 1,400 Syrian citizens were killed with a chemical weapon. US authorities blame the Syrian government for the attack. US President Barack Obama had threatened a targeted air strike on Syria if diplomacy failed.
Syrian President Bashar al-Assad denies responsibility, but he worked with Russia on an agreement to declare Syria’s chemical weapons to the Organization for the Prohibition of Chemical Weapons.
The US and its allies asked the United Nations on Sept. 16 for a resolution that would call upon Syria to dismantle its chemical weapons arsenal.
Meanwhile traders and analysts continue to watch the situation closely in case the agreement breaks apart. In other international news, Libya reported production has resumed at El Feel and Sharara oil fields. Strikes at Libya’s oil export terminals led to reduced crude output during August.
The October contract for benchmark US light, sweet crudes on the New York Mercantile Exchange fell $1.62 on Sept. 16, settling at $106.59/bbl. The closing was the lowest price for front-month crude since Aug. 26. The November crude contract declined $1.35 to settle at $106.19/bbl.
Heating oil for October delivery dropped 5¢ to a rounded $3.06/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for October fell 5¢ to $2.716/gal.
The October natural gas contract rose 6.1¢ to close at a rounded $3.74/MMbtu on NYMEX, the highest since July 23. Above-normal temperatures across the Midwest and south into Texas prompted higher gas-generated electric demand for air conditioning, analysts said. On the US spot market, the gas price at Henry Hub, La. was $3.68/MMbtu, up 4¢.
In London, the October IPE contract for North Sea Brent crude decreased $1.63 to $110.07/bbl. The October contract for gas oil settled at $944.25/tonne, down $5.50.
The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was down 83¢ to $109.04/bbl on Sept. 16.
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