Brent Under Pressure As Investors Turn Towards The Fed Meeting

Oil prices tumbled as worries about the situation in Syria subsided on Tuesday. Brent crude oil fell to $109.85 at 6:50 GMT on Monday morning as investors gained confidence in a UN program which will destroy Syria's nuclear weapons over the next nine months. After the US and Russia came to an agreement in which Syria will have a week to turn over its chemical weapons, the threat of military action in the fragile region dissipated. President Obama has said a military strike isn't out of the question if the Syrian government doesn't follow the UN's disarmament plan. Also pressuring Brent prices is the possible resolution of tension between the US and Iran which has long supported the commodity.

reported that Iran's atomic energy chief is looking to resolve the ongoing dispute between Iran and the West over the Tehran's nuclear capabilities. The news put pressure on Brent prices as a diplomatic solution to the issue could mean an end to the sanctions on Iranian oil. Anticipation of the US Federal Reserve meeting, which begins on Tuesday, also weighed on Brent prices. The bank is likely to cut its stimulus program by $10 to $15 billion which could drive Brent prices even lower. Brent found some support from the ongoing labor strikes in Libya which have closed several of the country's largest export terminals. Strikes in the African nation have cut Libyan oil exports to less than half of their normal capacity and caused Libya to default on its contractual obligations. Now, as the winter season approaches and demand is forecast to increase, prices will be supported by the tighter supply.