Oil prices fall on easing jitters about Syria strike

World oil prices fell for a second straight day Friday as speculation eased about an imminent US-led military strike against Syria over its alleged use of chemical weapons. New York's main futures contract, West Texas Intermediate (WTI) for delivery in October, sank $1.15 to close at $108.80 a barrel on the final trade day of the month and ahead of a long holiday weekend. US markets will be closed Monday for the Labor Day federal holiday. In London trade, Brent North Sea crude oil for October dropped $1.07 to $114.01 a barrel. Despite the sell-off, oil was still trading at one of the highest levels in months. The market surged on Wednesday in anticipation of Western military strikes on Syria, with New York crude striking $112.24, the highest level since early May 2011. Brent soared to $117.34 a barrel, last seen in late February. But prices retreated on Thursday and Friday as prospects receded for an imminent strike against Syria over its alleged use of chemical weapons. They briefly pushed higher in the Friday trading session as US Secretary of State John Kerry laid out an impassioned case for a "tailored" US military response to the Syrian government's alleged use of chemical weapons against its own civilians. The top US diplomat cited a White House intelligence report as providing "high confidence" to the Obama administration that Syrian President Bashar al-Assad's government was responsible for the deadly August 21 attack. US President Barack Obama nevertheless said he had not made a "final decision" on striking Syria. On Thursday, key US ally Britain dropped out of the coalition planning military strikes following a parliamentary vote. "Oil prices continue to be under the spell of the Syrian crisis," said Commerzbank analyst Carsten Fritsch. Although Syria is not a major oil producer, traders are nervous that the civil war there could trigger broader conflict in the crude-rich Middle East. "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."