Oil prices extend losses on easing fears of possible Syria strike
LONDON - Oil prices fell further on Tuesday from recent highs on easing fears of a possible military strike on Syria, with the US appearing open to a Russia plan for Damascus to give up its chemical weapons.
Brent North Sea crude for October shed $1.52 to stand at $112.20 a barrel in London midday deals.
New York's main contract, West Texas Intermediate for October, slid $1.87 to $107.65 a barrel.
"Proposals set forward by Russia which would see Syria place its chemical weapons under international control helped alleviate oil supply concerns," said Sucden brokers analyst Kash Kamal.
"Both front month benchmark prices have been rising in recent weeks as increasing concerns over the effect of a US military strike supported the oil market."
Crude futures had on Monday begun falling from 28-month highs reached last Friday on Syria-fuelled supply tensions.
The New York benchmark last week shot up to $110.53 a barrel, the highest level since May 2011.
Traders seized on a possible breakthrough in the Syria crisis after Russia proposed a plan to avert a US-led strike on Damascus by securing a deal for the regime to destroy its chemical weapons.
US President Barack Obama said the move could be a "significant breakthrough", easing fears of an attack that many analysts fear could lead to a wider conflict in the oil-rich Middle East.
Tight market conditions have also eased with the gradual recovery of crude production levels in Libya.
Libyan oil exports plunged more than 70 percent in August after protesters, including policemen and border guards, forced export terminals to shut over demands for back pay.
Sliman Qajam, a member of the Libyan parliament's energy committee, said Monday that the country's production has rebounded to 600,000 barrels a day, and all export terminals will be open by the middle of next week.