Oil market slides on Syria news

World oil prices fell further on Friday as prospects receded for an imminent Western military strike against Syria over its alleged use of chemical weapons, analysts said. New York's main contract, West Texas Intermediate (WTI) for delivery in October, sank $1.01 to $107.79 per barrel. Brent North Sea crude oil for October dropped 23 cents to $114.93 a barrel. "Oil prices continue to be under the spell of the Syrian crisis," said Commerzbank analyst Carsten Fritsch. US plans to build an international coalition for a "limited" strike on Syria suffered a blow when British lawmakers on Thursday voted against the use of force. The White House signalled however that President Barack Obama would take unilateral action if necessary. "After the House of Commons in the UK failed initially to approve Britain's participation in a military strike against Syria, the pendulum is now swinging back in the direction of declining risks," Fritsch added. "Even if this does not imply by any means that military action is out of the question, a limited unilateral campaign by the US would probably have far fewer consequences for the oil market than a major international offensive. "Oil prices therefore came under massive pressure." The market had surged on Wednesday in anticipation of a military strike on Syria. At one stage, New York crude hit $112.24 to reach the highest level since early May 2011, while Brent soared to $117.34, last seen in late February. Although Syria is not a major oil producer, traders are nervous about a broader conflict in the crude-rich Middle East region, including neighbouring Iraq, which is becoming a major exporter. "The fact of the matter is nothing has happened thus far with regards to Syria, and that has calmed the crude markets," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP. "WTI prices have also scaled down after latest figures showed a rise in US crude stockpiles," he said. The US government's Energy Information Administration (EIA) said on Wednesday that American oil reserves increased by about three million barrels in the week ending August 23. That confounded market expectations for a modest decline and indicated weaker demand in the world's biggest crude consuming nation. "Overall, the market showed a muted reaction to the EIA's weekly set of numbers, given ongoing geopolitical jitters," noted VTB Capital analyst Andrey Kryuchenkov.