Crude dropped from a three-year high as concerns about conflicts in the Middle East eased.
Futures declined 1.7 percent in New York after rallying for five sessions. President Donald Trump declared “mission accomplished” a day after the US, France and the UK bombed Syria in response to chemical attacks on civilians.
“There is a bit of relief in the market that the expected Syrian missile strike didn’t spill over into a broader regional conflict or escalate,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. “They really threaded the needle in terms of keeping the mission limited.”
Last week, oil in New York and London jumped to the highest levels since 2014 as tensions mounted in the Middle East region that’s home to almost half the world’s crude. Meanwhile, US oil output has surged for seven straight weeks and drilling activity is at the highest since 2015.
Kuwait Oil Minister Bakheet Al-Rashidi said OPEC and allied producers will consider extending their agreement to reduce output into 2019 when they gather in June.
“Part of the reason we rallied so strongly was the situation in Syria,” said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York. “The chance of an expansion of hostilities seems to be diminished by a long-shot.”
West Texas Intermediate for May delivery slid $1.17 to settle at $66.22 a barrel on the New York Mercantile Exchange. Total volume traded was about 10 percent above the 100-day average.
Brent for June settlement dropped $1.16 to end the session at $71.42 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.22 premium to June WTI.
Yuan-denominated futures for September delivery rose 0.4 percent to 427.9 yuan a barrel on the Shanghai International Energy Exchange.
UK Foreign Secretary Boris Johnson insisted that the hit on Syria’s chemical arms infrastructure was a one-time move with “no proposal on the table” for further strikes.