(For more on the Syria conflict, see EXTRA <GO>)
Sept. 13 (Bloomberg) -- West Texas Intermediate headed for its first weekly decline in three weeks as the U.S. and Russia started talks on a plan for Syria to surrender its chemical weapons to avert a strike that could stoke Middle East tensions.
WTI slid as much as 1.2 percent and has lost 2.3 percent this week. U.S. Secretary of State John Kerry reported a “constructive” start to talks in Geneva today with Russian Foreign Minister Sergei Lavrov over the chemical weapons. Syria called for the U.S. to drop its military threats and stop arming rebels. Libya declared force majeure yesterday on three more crude-export terminals as workers continue to strike, according to state-owned National Oil Corp.
“A lot of the geopolitical risk in prices linked to Syria has deflated over the past week as the U.S. accepts to explore alternative diplomatic routes with the Russians to solving the Syrian crisis,” said Harry Tchilinguirian, head of commodity- markets strategy at BNP Paribas SA in London. “With the decline in prices, the market has a good entry point to go long oil again.”
WTI for October delivery fell as much as $1.29 to $107.31 a barrel in electronic trading on the New York Mercantile Exchange, and was at $107.99 as of 1:27 p.m. London time. The contract rose 1 percent to $108.60 yesterday. The volume of all futures traded was about 30 percent less than the 100-day average.
Brent for October settlement, which expires today, dropped 7 cents to $112.56 a barrel on the London-based ICE Futures Europe exchange. The more active November contract was up 8 cents at $111.61. The front-month European benchmark crude was at a premium of $4.61 to WTI compared with $4.03 yesterday.
Kerry and Lavrov will discuss practicalities of securing, transporting, destroying and monitoring Syria’s chemicals arsenal in talks that started at 9:30 a.m., a U.S. official said. The negotiations won’t be about the text of a United Nations resolution that could govern the enforcement of a plan, the official said on condition of anonymity.
The U.S. says President Bashar al-Assad’s regime used sarin gas outside of Damascus on Aug. 21, killing more than 1,400 people.
The Middle East accounted for about 35 percent of global oil production in the first quarter of this year, according to the International Energy Agency. Syria borders Iraq, the biggest producer after Saudi Arabia in the Organization of Petroleum Exporting Countries.
Libya declared force majeure on exports from the Mellitah, Hariga and Zawiya ports, Nuri Berruien, the chairman of NOC said in yesterday’s statement. The legal clause excuses the company from meeting its delivery commitments because of circumstances beyond its control.
The OPEC nation is pumping about 200,000 to 300,000 barrels a day, compared with a post-revolution high of 1.6 million barrels a year ago, Prime Minister Ali Zaidan said in Tripoli on Sept. 11. Force majeure is in place at three other terminals. Libya is losing $130 million a day because of the stoppages, according to the finance ministry.
WTI may rise next week, a Bloomberg News survey showed. Eleven of 25 analysts and traders, or 44 percent, forecast futures will increase through Sept. 20. Eight respondents, or 32 percent, predicted a drop and six projected no change. Last week, 44 percent in the survey said there would be a price gain.
--With assistance from Rupert Rowling in London. Editors: Raj Rajendran, Randall Hackley