Oil prices strike multi-week lows

Global oil prices dived to multi-week lows on Tuesday on fading Syria worries and ahead of the US Federal Reserve meeting, traders said. New York's main contract, West Texas Intermediate for October, sank to $105.50 a barrel -- which was last witnessed in early September. It later stood at $105.37, down $1.03 from Monday's Brent North Sea crude for delivery in November slid to a five-week low at $108.02. The contract then pulled back slightly to $108.24, down $1.83 from Monday. "Oil prices have fallen through the day... as the threat of military action (in Syria) continues to dissipate," said analyst Joe Conlan at British-based energy consultancy Inenco. He added: "News that production would resume at one of the largest oil fields in western Libya helped prices fall yet further, with an agreement between the government and demonstrators having been reached." The oil market had plunged by more than a dollar and a half on Monday, 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 feared that a possible US-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, Western powers were poised on Tuesday to press their efforts for a UN resolution to rid Syria of chemical weapons, one day after a report by the world body describing a "chilling" sarin gas attack there. United Nations experts, without assigning blame, said they had gathered "clear and convincing evidence" that surface-to-surface rockets took sarin gas into the opposition-held Damascus suburb of Ghouta on August 21. The United States had threatened a military strike on Syria over the attack, which it said killed more than 1,400 people. Washington said responsibility for the attack rests squarely with the regime of President Bashar al-Assad. "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. Elsewhere, traders are also awaiting the outcome of a two-day monetary policy gathering of the US Federal Reserve. Policymakers are widely expected to announce the start of a pull-back of the central bank's massive asset-purchase programme, known as quantitative easing (QE). The meeting concludes on Thursday. "Further falls may be seen should the US Federal Reserve decide to wind up its stimulus programme, which analysts expect to be announced," added Inenco analyst Conlan. "This would strengthen the dollar and help to further suppress prices."