The price of oil fell below $107 a barrel Monday on waning fears of a wider Middle East conflict thanks to an international deal intended to halt the use of chemical weapons in Syria.
The benchmark oil contract for October delivery fell $1.62 to $106.59 a barrel in New York.The contract for November delivery for Brent crude, the benchmark for international crudes used by many U.S. refineries, fell $1.63 to $110.07 a barrel in London.
The average retail price of gasoline fell less than a penny to $3.52 per gallon. The national average has either fallen or remained flat every day this month, and is now lower than it has been since July 10.
The price of gasoline is slowly falling despite relatively high oil prices because of seasonal factors. Gasoline consumption declines in the fall and looser wintertime clean air rules allow refiners to switch to lower-cost blends of gasoline. Also, a quiet hurricane season so far has meant there have been no weather-related refinery interruptions.
Oil prices are moderating because the deal between American and Russian chemical weapons negotiators reduces the chance of U.S. military action in Syria and the possible spread of Middle East violence.
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.
Prices have not fallen further, traders say, because civil unrest and labor conflicts in Libya, which is a major oil producer, has reduced the country's exports.
"The more fundamental issue of constrained Libyan exports continued unabated," said a report from JBC Energy in Vienna.
