Oil falls as US weighs Syria action
The price of oil fell Wednesday amid uncertainty over U.S. plans to launch a punitive strike against Syria.
By midday, benchmark oil for October delivery was down $1.29, or 1.2 percent, to $107.25 a barrel on the New York Mercantile Exchange.
During a visit to Sweden, President Barack Obama said the credibility of the international community and Congress is on the line in the debate over how to respond to the alleged use of chemical weapons in Syria.
As Obama made his case, his appeal for military intervention ran into trouble on Capitol Hill. The Senate Foreign Relations Committee delayed its public meeting and met in private after Sen. John McCain, an outspoken advocate of intervention, said he did not support the latest version of the Senate resolution to authorize military force.
The U.S. says it has proof that the regime of President Bashar Assad was behind attacks that Washington claims killed at least 1,429 people, including more than 400 children. The Britain-based Syrian Observatory for Human Rights, which collects information from a network of anti-regime activists, says it has so far only been able to confirm 502 dead.
Russian President Vladimir Putin warned the West Wednesday against taking one-sided action in Syria but also said Russia "doesn't exclude" supporting a U.N. resolution on punitive military strikes if it is proved that Damascus used poison gas on its own people.
While Syria is not a major oil producer, the possibility of a wider conflict could interrupt production and shipping routes in the region, said Chris Faulkner, CEO of Breitling Energy Companies.
Syria, he said, is a "small, delicate pin in the world's major oil grenade and it could blow up in the world's face if the U.S. is not very careful."
Investors will later be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending Aug. 30 is expected to show draws of 2.5 million barrels in crude oil stocks and 1 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Wednesday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Thursday.
Brent, the benchmark for international crudes, was down 66 cents to $115.02 a barrel on the ICE Futures exchange in London.
In the U.S., the average price for a gallon of gasoline held steady at $3.59. That's 2 cents less than a week ago and 23 cents cheaper than at this time last year.
In other energy futures trading on Nymex:
— Wholesale gasoline was flat at $2.86 per gallon.
— Heating oil fell 1 cent to $3.14 per gallon.
— Natural gas dropped 2 cents to $3.65 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.