Oil lower after U.S., Russia reach Syria deal

Investing.com - Oil futures traded lower in the early part of Tuesday’s Asian session after the U.S. and Russia agreed over the weekend on terms to dismantle Syria's chemical weapons cache.

On the New York Mercantile Exchange, light, sweet crude futures for October delivery fell 0.65% to USD105.90 per barrel in Asian trading Tuesday. The October contract settled down 1.50% at USD106.59 per barrel on Monday.

The U.S. and Russia Syria one week to disclose its chemical weapons stockpiles, which will go undergo inspections by November. Russia intervened to broker a diplomatic solution after it became apparent the U.S. would entertain thoughts of a military strike against Syria for using chemical weapons against its own citizens.

Tepid economic data out of the U.S., the world’s largest oil consumer, also pressured crude. In U.S. economic news out Monday, a report from the Federal Reserve today showed U.S. industrial production rose 0.4% last month after a flat reading in July. The August increase was the biggest in six months. Housing and automobile production paced the gains.

The New York Federal Reserve’s Empire State Manufacturing survey fell to 6.29 from 8.24 in August. Economists expected a reading of 9.20. The new orders index rose to 2.35 from 0.27 while shipments soared to 16.43, the highest level in more than a year, from 1.47. Readings above zero indicate expansion.

Elsewhere, Libya restarted some production at the El Feel and Sharara fields after talks between the government and striking workers. Libya’s oil production has plunged to a mere 250,000 barrels per day amid geopolitical and labor strife. The country was producing more than five times that in early 2011. Libya, an OPEC member, is home to Africa’s largest oil reserves.

Meanwhile, Brent futures for October delivery inched down 0.05% to USD109.60 per barrel on the ICE Futures Exchange.