Oil edges down toward $108 as Syria talks continue

PAMELA SAMPSON, AP Business Writer

BANGKOK (AP) — Oil prices fell slightly Friday as the U.S. and Russia held discussions in Geneva aimed at getting Syria to give up its chemical weapons.

Talks between U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov didn’t appear to yield an immediate solution Thursday but were a sign that the Obama administration is willing to give diplomacy a chance. Talks were to resume Friday.

President Barack Obama says the U.S. has hard evidence that the Syrian government, embroiled in a civil war against rebels, used deadly chemical weapons against civilians last month. In doing that, President Bashar Assad crossed a “red line” that Obama insists calls for a heavy-duty response.

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Syria is not a major oil producer, but oil traders say the possibility of a wider conflict could interrupt production and shipping routes in the Middle East and cause prices to rise. In recent days, oil prices have risen and receded in accordance with the perceived likelihood of a U.S. military attack.

On Friday, benchmark oil for October delivery fell 4 cents to $108.56 per barrel at midday Bangkok time. The contract gained $1.04 to close $108.60 a barrel on the New York Mercantile Exchange. Oil rose as high as $109.16.

The easing tensions over Syria came amid figures showing Europe’s industrial sector sliding into reverse during July. Eurostat reported Thursday that industrial output slumped 1.5 percent in July from the previous month. Slumping growth in the 17-nation eurozone points toward reduced demand for energy in the future.

“Eurozone is technically out of recession. But growth momentum is expected to remain anaemic as the structural weakness in the region is unlikely to be resolved in the near term,” analysts at DBS Bank Ltd. in Singapore said in a research note.

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Brent, the benchmark for international crudes, was up 22 cents to $111.75 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline rose 0.4 cents to $2.7579 per gallon.

— Natural gas fell 0.1 cent to $3.637 per 1,000 cubic feet.

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— Heating oil added 0.7 cents to $3.1234 per gallon.