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Oil falls as fears of U.S.-led military attack on Syria fade

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(Globalpost/GlobalPost)

BANGKOK - The price of oil slipped again Tuesday, a day after hitting a six-week low, as fears of a U.S.-led military attack on Syria faded.

Benchmark oil for November delivery was down 6 cents to US$103.53 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.16, or 1.1 per cent, to close at $103.59 on Monday. Oil has dropped 6.3 per cent since closing at a two-year high of $110.53 on Sept. 6.

Some analysts said that apparent diplomatic progress over the elimination of Syria's chemical weapons and a seeming thaw in relations between Iran and Western powers were easing fears of a potential disruption in oil supplies.

The U.S. had threatened to attack Syria in retaliation for an alleged chemical gas attack against civilians. But the Obama administration has since said diplomats would be given a chance to convince Syrians to turn over their chemical weapons before deploying military force.

Carl Larry of Oil Outlooks and Opinions said "too much faith" was being put in Iran, which has agreed to participate in talks about its nuclear program with the U.S. and five other countries later this week at the UN. The talks will be the highest level contacts between the U.S. and Iran in six years.

He said oil is likely to return to recent highs around $110 a barrel.

"This move lower will continue to fade," Larry said in a market commentary. "Make no mistake, oil prices will come back to the norm."

Brent crude, the benchmark for international crudes used by many U.S. refineries, rose 15 cents to $108.31 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline fell 0.1 cent to $2.614 per gallon.

— Natural gas lost 1.3 cents to $3.589 per 1,000 cubic feet.

— Heating oil retreated 0.3 cents to $2.954 per gallon.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)

http://www.globalpost.com/dispatch/news/the-canadian-press/130923/oil-falls-further-syrian-risk-fades-us-gasoline-prices-at-lo