Brent Slides As Military Intervention In Syria Becomes Less Likely
Brent crude oil tumbled on Tuesday after Russia's proposal about the situation in Syria was well received and put US military strikes on pause. The commodity traded at $112.90 at 6:50 GMT on Tuesday morning as the possibility of a US military strike in Syria became less likely.
Russia has proposed that Syria give up its chemical weapons to international control in order to avoid targeted military attacks. The plan was well received by President Obama, who said Syria's agreement to the proposal would deter the US from using military force. Although the possibility of an attack is still present, this new development has significantly decreased the chances of US intervention.
CNBC reported that President Obama has said Russia's proposal could be a possible breakthrough, but US officials are wary of the deal because of its complications. Not only would it take years to destroy Syria's chemical weapons, but the country's ongoing civil war would make it difficult for inspectors to ensure that the nation had in fact turned over all of its chemical weapons.
On Tuesday, the President will spend the day discussing the matter with US lawmakers and is set to address the American people in the evening. If the Syrian crisis is resolved non-violently, many expect to see Brent prices fall to under $110 per barrel.
Brent found some support from Chinese data that improved the demand outlook for the number two oil consuming nation. Chinese industrial output increased by 10.4 percent in August, compared to a year ago. The country's retail sales also increased by 13.4 percent, adding to evidence that the Chinese economy was stabilizing.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.