U.S. crude-oil futures fell Tuesday in electronic trade, extending losses as a non-military proposal to calm tensions over Syria emerged, but the pullback came ahead of an expected decline in weekly U.S. oil supplies.
Crude oil for October delivery fell 99 cents, or 0.9%, to $108.30 a barrel.
Oil futures retreated Monday from their highest close in more than two years as the prospects of a U.S.-led retaliatory strike against Syria appeared to wane, with Washington saying it will consider Russia’s call for Syria to turn over its chemical weapons to international control.
Late Monday, October crude fell below $109 a barrel after U.S. President Barack Obama said in a series of television interviews that he would put air strikes on hold if Syria gave up the weapons. Obama also said he wasn’t confident that Congress will authorize a strike on Syria.
Separately, Senate Majority Leader Harry Reid delayed a test vote on the military resolution that had been scheduled for Wednesday.
October Brent crude , the European oil benchmark, lost 86 cents, or 0.8%, on Tuesday to $112.86 a barrel.
Brent on Monday saw a selloff of $2.40 a barrel on ICE Futures “and its spread over WTI dwindle to under $5, suggesting a shrinking political risk premium,” said CMC Markets senior market analyst Colin Cieszynski in a note late Monday.
Oil had seen a surge in prices recently after the Obama administration called for a military response against the Syrian government amid evidence the regime used chemical weapons against civilians.
Later Tuesday, investors will look for weekly supply data from the American Petroleum Institute, and analysts polled by Platts expect a decline of 2 million a barrel in U.S. crude-oil stocks.
The decrease will likely be focused in the Midwest, where there have been “steady draws” at Cushing, Okla., the delivery point for the New York Mercantile Exchange crude-oil futures contract, said Platts in a note Monday.
Gasoline stocks are expected to fall 1 million barrels, while distillate stocks are forecast to rise 800,000 barrels.
The API data are slated to be released at 4:30 p.m. Eastern time Tuesday. More closely watched data from the U.S. Energy Information Administration are due Wednesday at 10:30 a.m. Eastern.
Elsewhere in the energy complex Tuesday, October gasoline fell 3 cents, or 1.1%, to $2.77 a gallon, while October heating oil lost 2 cents, or 0.6%, to $3.10 a gallon.
October natural gas was unchanged at $3.61 per million British thermal units.
Source : Marketwatch