Oil prices were down slightly but still above $107 a barrel Tuesday as President Barack Obama’s struggle to win support for U.S. military intervention in Syria diminished expectations of an imminent attack.
By early afternoon in Europe, benchmark crude for October delivery was down 35 cents to $107.30 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.15 to close at $107.65 on Friday and Nymex floor trading was closed Monday because of Labor Day.
Obama on Monday met with key U.S. lawmakers to try to drum up support for military strikes against the regime of President Bashar Assad to respond to an attack in the Damascus suburbs last month that the U.S. says killed at least 1,429 civilians. A vote could come once Congress returns from its summer break, which is scheduled to end Sept. 9.
On Tuesday, Secretary of State John Kerry, Defense Secretary Chuck Hagel and others were to appear before the Senate Foreign Relations Committee in the first public hearings about the possible military intervention in Syria.
While Syria is not a major oil producer, it straddles a region that is. The possibility of a wider conflict, one that could interrupt production and shipping routes in the region, has pushed oil prices higher in recent days. Conversely, prices have slid as the prospect of a U.S. attack diminished.
Additionally, a missile test carried out Tuesday by Israel and the U.S. in the Mediterranean Sea and on an air force base in central Israel pushed oil prices higher when news of the event was first reported by state-owned Russian media.
Oil prices spiked higher “on what turned out to be a false alarm,” said analyst Fawad Razaqzada of GFT Markets in London, as the Russian report led to “panic buying of crude oil amid fears of imminent strike on Syria.”
Markets will also be keeping an eye on a survey of U.S. manufacturing for August being released later Tuesday by the Institute for Supply Management.
Besides the uncertainty over developments in the Middle East, oil prices have been supported as well in recent days by stronger-than-expected manufacturing data from China and the European Union.
Were the U.S. figures to also show “a marked improvement … then oil prices could get a further boost,” Razaqzada said.
Brent, the benchmark for international crudes, was up $1 to $115.01 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
Wholesale gasoline was down 0.51 cent to $2.885 per gallon.
Heating oil rose 1.53 cents at $3.1519 per gallon.
Natural gas climbed 7.9 cents to $3.66 per 1,000 cubic feet.
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