Brent crude oil slid lower as world leaders met to work out the details of the UN's disarmament program in Syria.
As the UN moves forward with a non-violent solution to the situation in Syria, worries about a US military response disrupting the fragile balance in the Middle East dissipated and pushed commodity prices lower. At 7:30 GMT on Wednesday, Brent was trading at $108.21, a far cry from its highs in August.
Disruptions in Libya have also supported Brent prices recently, however the country is slowly resolving the labor issued that caused the closure of several of its largest export terminals. CNBC reported that Libyan oil exports are expected to rise to 400,000 to 450,000 barrels per day now that one of the nation's largest oilfields, El Sharara, has resumed production. Although the African nation is still operating at less than its normal capacity, the ramp up in production indicated that the worst was over.
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Oil also took a hit as investors sold the commodity in preparation for a highly anticipated policy statement from the Federal Reserve, expected at the end of the day on Wednesday. The bank is expected to announce the beginning of its tapering plan, with most betting on a $10 to $15 billion slash in its stimulus spending. The Fed's $85 billion per month asset buying plan has supported commodities, so its removal will likely pressure prices.
Investors will also be watching for oil inventory data from the US Energy Information Administration, also due out on Wednesday. The report is expected to show that US crude stockpiles declined by about 1.4 million barrels.
