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Crude oil futures tumble after Syria accepts Russian proposal

Published 09/10/2013, 07:45 AM
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Investing.com - Crude oil futures tumbled on Tuesday, after Syria’s foreign minister said Syria will accept Russia’s proposal to put chemical weapons under international control.

On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD107.60 a barrel during U.S. morning trade, down 1.75%.

New York-traded oil futures held in a range between USD107.56 a barrel, the daily low and a session high of USD109.01 a barrel. The October contract settled 0.9% lower at USD109.52 a barrel on Monday.

Oil futures were likely to find support at USD106.55 a barrel, the low from September 3 and resistance at USD110.70 a barrel, the high from September 6.

Oil prices tumbled after Syrian Foreign Minister Walid al-Moallem said that his country will agree to turn over its chemical weapons to international control, easing concerns over a U.S. military strike against Syria.

U.S. President Barack Obama said Monday that he would put plans for a military strike against Syria on hold if the country agrees to a Russian proposal to place its chemical weapons under international control.

While Syria is not a major oil producer, investors fear that the two-year-old civil war could spill over to affect oil supplies in nearby countries.

Oil prices surged to a 27-month high of USD112.22 a barrel on August 28 amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery dropped 1.6% to trade at USD111.89 a barrel, with the spread between the Brent and crude contracts standing at USD4.29 a barrel.

London-traded Brent prices fell to a session low of USD111.86 a barrel earlier, the weakest level since August 27.

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