Brent crude oil dropped below $116 a barrel on Thursday as the possibility of a delay in a US-led military strike on Syria helped calm concerns over West Asian oil supplies.
The West has been gearing up for an attack in response to last week’s chemical weapons attack, although US President Barack Obama faced new obstacles with British allies and US lawmakers that could delay any imminent action.
Brent crude for October delivery hit a low of $114.94 a barrel, down $1.67, before recovering to trade around $115.75 by 1110 GMT. It jumped over 5% in the previous two sessions, posting its strongest two-day gain since January 2012.
October US crude fell $1.50 to a low of $108.60 a barrel before rallying to around $109.30, following a near 4% gain over the past two days.
“The market is reassessing the supply implications of the conflict in Syria,” said Eugen Weinberg, global head of commodities at Germany’s Commerzbank.
Obama said on Wednesday that a “tailored, limited” strike, not a protracted engagement like the unpopular Iraq war, could be enough to send a strong message that the use of chemical weapons cannot be tolerated.
Oil has jumped this week to multi-month highs on fears that the potential strike on Syria could spread unrest to major oil producers in the West Asia and disrupt supply.