LONDON: Brent crude oil fell towards $108 a barrel Friday, heading for its third straight weekly decline, with diplomatic efforts over Syria and Iran helping ease worries about risks to supply from the Middle East.
The United States and Russia have agreed on a draft U.N. Security Council resolution aimed at eliminating chemical weapons in Syria. The United States and Iran also began talks to resolve a long-running standoff over Tehran’s nuclear program.
“The easing of geopolitical tensions and plentiful supply of the market give little reason for any rise in prices,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.
Brent crude oil for November fell by 90 cents to $108.31 a barrel by 1337 GMT.
U.S. crude for delivery in November dropped 20 cents to $102.83 a barrel, falling for a sixth session out of seven and down nearly 2 percent on the week.
A Reuters poll of 32 analysts showed Brent crude was expected to average $107.70 a barrel this year.
The North Sea benchmark, which peaked above $117 a barrel in August on concerns that the war in Syria would spiral out of control and hit Middle East oil output, has traded at an average of $108.49 per barrel so far this year.
Both Brent and U.S. light crude have shed nearly $8 a barrel from peaks hit earlier this month, with geopolitical risks in the Middle East dissipating, led by the diplomatic resolution on Syria’s chemical arsenal. The U.N. Security Council were to vote on the resolution later Friday.
Although Syria is not a major oil producer, any escalation of tension in the Middle East could disrupt flows from a region that supplies nearly a third of the world’s oil.
There is also growing progress between the West and Iran over the latter’s nuclear ambitions, which had prompted sanctions against Tehran. Iran and the United States held their highest-level substantive talks in a generation Thursday.
While a charm offensive by new Iranian President Hassan Rouhani has calmed some oil investors, analysts say increased Iranian crude exports are unlikely to happen any time soon.