Brent oil futures edged lower today, adding to the prior session's steep losses, as easing worries over Syria calmed fears that crude supply from the Middle East would be at risk.
But the modest drop suggests tensions have not completely faded after the US, Britain and France warned President Bashar al-Assad there would be consequences if he failed to hand over Syria's chemical weapons.
Brent crude for delivery in November was down 23 cents at $109.84 a barrel in morning trade, after touching a near one-month low of $108.73 in the previous session.
The oil benchmark slid 2.4% yesterday, its steepest single-day decline since June 20, after US and Russian officials reached a weekend deal to strip Syria of chemical weapons, easing worries about a US-led strike against Syria.
US crude for October delivery fell 61 cents to $105.98 a barrel, after hitting a session low of $105.59.
Brent has lost 6.4%since hitting a six-month high of $117.34 in late August when a US military strike against Syria appeared imminent. The US benchmark has dropped 5.6% since rising above $112 on August 28, its highest in more than two years.
Brent could ease towards $105 and US oil may fall towards $100, analysts said. They see further downward pressure for oil from the outcome of a US Federal Reserve policy meeting at which it is widely expected to begin withdrawing stimulus.
The Fed begins its two-day meeting later today and is expected to cut its monthly $85-billion bond purchases by at least $10 billion as it begins to close the era of cheap money that has boosted the flow of funds into commodities. Reducing the stimulus is likely to fuel a rally in the US dollar which could dent appeal of commodities priced in the greenback, such as oil.
