Brent holds above $111 as investors watch Syria developments

Reuters

By Yuka Obayashi

TOKYO (Reuters) - Brent crude futures held steady above $111 a barrel on Thursday as investors waited to see whether diplomatic efforts to eliminate Syria's chemical weapons avert the threat of U.S. military action that could lead to disruption of oil supplies.

Diplomatic efforts to place Syria's chemical weapons under international control intensified on Wednesday while U.N. rights investigators detailed what they called war crimes carried out largely by Syrian government forces in the civil war.

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov are to meet later on Thursday in Geneva to talk about Syria's chemical weapons arsenal.

"Traders are reluctant to change their positions as the outlook for Syria's problem remain uncertain," said Koichi Murakami, analyst at Daiichi Commodities Co Ltd. "Everyone is closely watching how Syria's situation will develop."

Brent crude for October was trading up 5 cents at $111.55 a barrel by 0348 GMT, after gaining 25 cents on Wednesday. Brent hit a six-month high of $117.34 a barrel on August 28, largely on the tensions over Syria.

U.S. crude was 3 cents higher at $107.59.

"Another focus in the market are the U.S. financial policies to be unveiled next week," Murakami said.

Expectations are growing that the Federal Reserve will decide next week to begin tapering its monetary stimulus, although last Friday's disappointing U.S. jobs data has convinced many economists that any reduction might be smaller than some had believed.

Still, any cut in the Fed's bond-buying programme would likely boost the dollar and pressure oil and other commodities priced in the greenback.

On Thursday, Saudi Oil Minister Ali al-Naimi said in Seoul that the global oil market is well balanced and that top exporter Saudi Arabia is ready to supply whatever volume of crude is needed to meet demand.

At the same industry event in Seoul, the United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui said global oil demand could see downside risks while economic growth in emerging markets and Europe slows and the United States imports less oil.

Graphic-U.S. crude analysis:

http://link.reuters.com/gyj92v

Graphic-Brent analysis:

http://graphics.thomsonreuters.com/AS/WT1/20131109092148.jpg

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

U.S. CRUDE STOCKS FALL

Crude stocks dipped by 219,000 barrels last week, data from the U.S. Energy Information Administration showed on Wednesday, a much smaller decline than the decrease of 1.5 million barrels analysts had expected.

Gasoline stocks rose unexpectedly, indicating that demand supported by the summer driving season had ended.

U.S. gasoline futures settled at $2.71 a gallon on Wednesday, its lowest closing price since mid-January. (Reporting by Yuka Obayashi; Editing by Tom Hogue)

View Comments (0)