US crude slides $1.62/bbl as geopolitical tensions ease

16 September 2013 21:07  [Source: ICIS news]

HOUSTON (ICIS)--NYMEX light sweet crude (WTI) for October delivery settled at $106.59/bbl, down $1.62, on Monday, responding to a weekend agreement between the US and Russia to handle Syria’s chemical weapons, which eased fears of an immediate military engagement.

On a separate note, Iran sent signals of a desire to negotiate with the West about the country's nuclear programme.

Crude futures were also tracking gasoline (RBOB) futures down on length liquidation in preparation for a change in specifications to winter-grade gasoline.

The sell-off overshadowed a weak dollar and a healthy rally in the stock market as investors responded positively to the weekend announcement that Larry Summers taking his name out of the running to head the US Federal Reserve. Summers was viewed by some as a controversial possible choice to replace Fed chairman Ben Bernanke upon Bernanke's departure, which is expected in January.

Downside momentum drove October WTI down to establish an intra-day low of $106 10/bbl, down $2.11, before the dip attracted buying.

On the first session as spot month, ICE Brent for November delivery bottomed out at $108.73/bbl before settling at $110.07/bbl, down $1.63.

By: Ignacio Sotolongo
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