WTI Trades Near Week Low as U.S. Weighs Limited Syrian Strikes

Bloomberg (05/9) - West Texas Intermediate traded near the lowest price in a week as the U.S. weighed limited military strikes on Syria, damping speculation that conflict will spread and disrupt oil supplies from the region. Futures were little changed in New York after falling the most in two weeks yesterday. The Senate Foreign Relations Committee voted to authorize President Barack Obama to conduct a restricted operation against Syria, clearing the way for consideration of the resolution by the full Senate. U.S. crude stockpiles shrank 4.16 million barrels last week, according to the American Petroleum Institute. WTI for October delivery was at $107.36 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange at 10:05 a.m. Sydney time. The contract yesterday dropped 1.2 percent to $107.23, the biggest decline since Aug. 20 and the lowest settlement since Aug. 26. The volume of all futures traded was about 78 percent below the 100-day average. Brent for October settlement was 5 cents higher at $114.96 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.54 to WTI futures, from $7.68 yesterday. The resolution supports the use of force in a “limited and specified manner against legitimate military targets” during a 60-day period following enactment, with a possible 30-day extension at Obama’s request. The resolution doesn’t authorize the use of U.S. ground troops in combat roles. The full Senate will consider it next week. The Middle East accounted for about 35 percent of global crude production in the first quarter of this year, according to the International Energy Agency. Syria borders Iraq, the biggest producer after Saudi Arabia in the Organization of Petroleum Exporting Countries.