Oil prices dropped on Tuesday, with the price of Brent crude, the global oil benchmark, dropping by 0.11 per cent to $72.06 per barrel.
The US West Texas Intermediate crude price dropped 0.20 per cent at $68.23 at 09.50 WAT, just as concerns eased about the fallout from Syrian President Bashar al-Assad’s overthrow.
Both benchmarks had climbed more than 1 per cent on Monday.
In a report on Tuesday, Reuters said that while Syria itself is not a major oil producer, it is strategically located and has strong ties with Russia and Iran, and a regime change could raise regional instability.
The 24-year rule of Bashar al-Assad in Syria appeared to be over after rebel groups seized Damascus in the early hours of December 8.
Consequently, Syria’s rebels commenced working to form a government, restoring order after Assad ouster with the country’s banks and oil sector set to resume work on Tuesday.
According to the report, the market is also focused on the possibility of a rate cut by the US Federal Reserve next week, which could bolster oil demand “in the world’s biggest economy”.
“The Fed is expected to cut rates by 25 basis points at the conclusion of its meeting on December 17-18, but traders are waiting to see if inflation data this week could derail the outlook,” the report reads.
“Declines were capped by positive expectations on China’s economy, following reports that China will adopt an “appropriately loose” monetary policy next year – the first easing of its stance in some 14 years, to spur economic growth in the world’s top oil importer.”
On December 5, the Organisation of Petroleum Exporting Countries (OPEC) extended Nigeria’s oil production quota of 1.5 million barrels of crude per day (bpd) to 2026.
