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Oil prices were dealt as blow today as investors expressed fears regarding the US’s intervention in Syria and concerns that the Middle East crude supply could be hit.

Brent crude fell by 30 cents at $109.77, while US oil dropped by 50 cents to $106.098, reported Reuters.

US strikes on Syria now look unlikely after a deal was struck to remove Syria’s chemical weapons.

However, the US, UK and France have warned Syria that the country will have to face major consequences if they fail to surrender chemical weapons in accordance with the recent deal.

The oil benchmark saw its steepest drop since June this year when it lost 2.4% on Monday, followed by the US-Russia deal over Syria easing tensions.

On Tuesday, the Federal Reserve initiated a two-day meeting to review its monthly $85bn bond purchases. Analysts believe the Fed would cut purchases by nearly $10bn by bringing curtains down on the era of cheap money used to push funds into commodities.

Oil, along with various commodities priced in the greenback, is expected to be hit if Fed decides to reduce its stimulus, reported Reuters.


Image: Oil prices drop following Middle East crude supply worries. Photo courtesy of Victor Habbick.

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