Gasoline Slides With Crude as Syria Strike Prospect Quelled
Gasoline fell along with crude as a U.S. accord with Russia reduced the threat of an American military strike against Syria.
Futures slid as the Sept. 14 agreement to pursue the destruction of Syria’s chemical weapons eased concern that Middle East regional tensions would be ignited and crude supply disrupted by a U.S. targeted attack on Syria.
“The biggest contributor to today’s decline is that Russia and the U.S. have agreed on a plan to put Syria’s chemical weapons under international control,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The market doesn’t see the U.S. conducting a missile attack on Syria for an extended period of time.”
Gasoline for October delivery fell 4.54 cents, or 1.6 percent, to $2.7242 a gallon at 9:31 a.m. on the New York Mercantile Exchange on trading volume that was 8.3 percent below the 100-day average.
The accord, negotiated by U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, sets a framework for finding, securing and destroying Syrian President Bashar al-Assad’s stocks of poison gas. The agreement quelled the prospect of a U.S. military strike on Syria in response to an Aug. 21 chemical weapons attack outside Damascus.
“This is mostly about Syria today,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “The market beginning last week was in the process of removing the risk premium that had been attached to Syria.”
Pump prices, averaged nationwide, fell 0.6 cent to $3.517 a gallon, 34.7 cents below a year ago, Heathrow, Florida-based AAA said today on its website.
Ultra-low-sulfur diesel for October delivery fell 2.63 cents, or 0.8 percent, to $3.0874 a gallon. Trading volume was 19 percent above the 100-day average.
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