WTI headed for a third weekly loss as the five permanent members of the UN Security Council prepared to vote on a resolution to eliminate Syria’s chemical weapons, easing the risk of wider conflict in the Middle East.
Futures fell as much as 0.7 percent, and have lost 2 percent this week in the longest run of weekly losses in four months. The United Nations Security Council will vote tonight on a resolution requiring President Bashar al-Assad’s government to surrender its chemical weapons. Prices rose yesterday as U.S. jobless claims unexpectedly dropped, while growth in the world’s largest oil consumer accelerated in the last quarter.
WTI for November delivery fell as much as 67 cents to $102.36 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.60 as of 12:42 p.m. London time. Prices have lost 4.7 percent in September, capping third quarter gains at 6.2 percent and 12 percent for the year.
Brent for November settlement fell 41 cents, or 0.4 percent, to $108.80 a barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $6.20 to WTI, up from $6.18 yesterday.
Security Council members reached basic agreement on the Syria measure, said Sergei Lavrov, Russia’s foreign minister. A U.S. State Department official, who asked not to be identified, said Russia agreed to a binding and enforceable resolution, marking the first time the council will have declared the use of chemical arms as a threat to peace and security.
“We’re looking at a calmer outlook in the Middle East, and that’s a key driver at the moment,” said Michael McCarthy a chief market strategist at CMC Markets in Sydney. The Security Council resolution “is not only good for this instance, but suggests there is a mechanism that works to calm tensions in that important supply area.”
WTI rose to a two-year high on Aug. 28 amid concern that a U.S.-led assault against Syria would lead to a disruption of Middle East oil exports. The region accounted for 35 percent of global oil output in the first quarter of this year, according to the International Energy Agency.
The U.S. and Russia reached a framework deal on Sept. 14 that averted a military strike to punish Syria for what the U.S. says was chemical weapons attack on Aug. 21 by government forces that killed more than 1,400 people.
Also at the UN, foreign ministers from the U.S. and five other powers met with Iran’s top diplomat. The meeting yesterday represented the highest-level formal talks between the U.S. and Iran since before the 1979 Islamic Revolution.
Iran wants to reach a deal on its nuclear program within a year, according to a U.S. State Department official speaking on the condition of anonymity. U.S. and European sanctions aimed at curbing the country’s uranium enrichment plans have curtailed the country’s crude exports since July 2012.
U.S. jobless claims dropped by 5,000 to 305,000 in the week ended Sept. 21, a Labor Department report showed yesterday in Washington. The monthly average was the lowest since 2007. They were projected to increase to 325,000 last week, according to the median forecast of 49 economists surveyed by Bloomberg.
Gross domestic product rose at a 2.5 percent annualized rate, unrevised from the previous estimate, after expanding 1.1 percent in the first quarter, Commerce Department data show.
WTI may fall next week on concern that U.S. supplies will accumulate with a seasonal slowdown in demand, a Bloomberg survey showed. Fourteen of 29 analysts, or 48 percent, forecast crude will drop through Oct. 4. Seven respondents, or 24 percent, predicted a gain. Eight projected no change.
To contact the editor responsible for this story: Stephen Voss on email@example.com