Brent Steady On Non-Violent Solution In Syria
Brent was steady on Wednesday as the tension between the West and Syria eased. After tumbling four percent over the past two days, the commodity traded at $111.43 at 7:03 GMT on Wednesday morning.
Syria has accepted a proposal, backed by the country's ally Russia, to hand its chemical weapons over to international authorities. In doing so, the nation will avoid US military strikes but conflict over the proposal's details has created a deep division between the US and Russia. The BBC reported that the US, UK and France are calling for a defined timetable as well as consequences of failure in order to avoid stalling tactics. Russia has refused to back any draft which blames the Syrian government for the chemical weapons attack.
Despite infighting within the UN, the non-violent solution has taken pressure off oil markets as supply interruptions due to military action in the Middle East are off the table.
Brent prices also felt pressure from reports that Libyan oil exports could begin to pick up soon. Labor strikes have shut down several of the nation's largest export terminals and cut the country's exports to less than half of their normal capacity. However, the Libyan government's energy committee claimed they were working to resolve the issues.
Brent found some support from a revised growth forecast from the US Energy Information Administration which predicts that global oil demand will increase by 20,000 barrels per day to 1.11 million bpd in 2013. However the EIA slashed its 2014 oil demand growth forecast by 30,000 bpd. The EIA is set to release another report on Wednesday at 10:30 EDT.
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