Oil prices slipped on Tuesday as investors’ concerns eased about the fallout from Syrian President Bashar al-Assad’s overthrow while China vows to ramp up policy stimulus.
Brent crude futures were down 32 cents, or about 0.4 percent at $71.82 per barrel and the US West Texas Intermediate (WTI) crude futures were down 37 cents, 0.5 percent lower, at $68.00.
Syria’s rebels are working to form a government after they seized the Syrian capital of Damascus and President Assad fled to Russia over the weekend ending a 50-year rule of the Assad family in the Middle East country.
The prime minister of the country, Mr Mohammed Jalali agreed to hand power to the main rebel commander, Mr Ahmed al-Sharaa, better known as Abu Mohammed al-Golani, who met overnight with Mr Jalali and Vice President Faisal Mekdad to discuss a transitional government.
Market analysts noted that this could impact the crude market and increase the geopolitical risk premium on oil prices in the weeks and months to come amid yet more instability in the Middle East region.
Although Syria is not a major oil producer, it holds geopolitical clout due to its location and ties with top oil producers- Russia and Iran.
Meanwhile, China will adopt an “appropriately loose” monetary policy next year, the first easing of its stance in 14 years.
China’s economy has struggled this year which has affected oil demand.
The world’s largest oil producer has also cut interest rates and injected 1 trillion Yuan ($140 billion) into the financial system, among other steps.
The country is also preparing for the return of US President-elect Donald Trump to the White House in January, after threatening tariffs of 60 per cent or more on Chinese imports.
Traders also remained focused on US inflation data expected later this week that could make a case for a December interest-rate cut by the Federal Reserve next week.
Lower interest rates decrease the cost of borrowing, which can boost economic activity and spur oil demand.
The US central bank is expected to cut rates by 25 basis points at the conclusion of its meeting on December 17-18, but traders are waiting to see if inflation data this week could derail that outlook.
