Oil extends losses as Syria strike fears recede

Oil prices fell further in Asian trade Tuesday on receding fears of a disruption in Middle East supply after a US Russia deal to avert a Western military strike on Syria, analysts said. New York's main contract, West Texas Intermediate (WTI) for delivery in October eased 83 cents to $105.76 in afternoon trade, while Brent North Sea crude for November declined 47 cents to $109.60. "Crude oil prices fell after a Russia-United States agreement was established to gather and destroy Syria's chemical weapons," Teoh Say Hwa, head of investment at Phillip Futures in Singapore, said in a note. "This helped to ease investor (concerns) as the risk premium attached to possible US military intervention in Syria is now being removed," she said. WTI dropped $1.62 in New York trade Monday, while Brent eased $1.63 as investors reacted to the weekend deal between US Secretary of State John Kerry and his Russian counterpart Sergei Lavrov to dismantle Syria's chemical weapons by mid-2014. Investors had earlier feared that a possible U.S.-led strike on Syria in retaliation for its alleged use of chemical weapons against its own people would spark a wider conflict in the crude-rich Middle East. Meanwhile, traders are also awaiting the outcome Wednesday of a Federal Reserve monetary policy meeting. The policymakers are widely expected to announce the start of a pull-back of the central bank's massive asset-purchase program, known as quantitative easing (QE). "Regardless of the outcome of the Fed meeting, the market is pricing in the possibility that a more dovish stance will be taken," Kenny Kan, market analyst at CMC Markets in Singapore, told Agence France Presse. The latest U.S. crude stockpiles data, to be released by the U.S. Energy Information Administration Wednesday, is also in focus as investors look to it for clues about demand in the world's top oil consumer.