- POSTED: 18 Sep 2013 04:28
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Global oil prices tumbled on Tuesday on news that Libya has resumed some oil production and ahead of the conclusion of the US Federal Reserve's monetary policy meeting.
NEW YORK: Global oil prices tumbled on Tuesday on news that Libya has resumed some oil production and ahead of the conclusion of the US Federal Reserve's monetary policy meeting.
New York's main contract, West Texas Intermediate for October, sank $1.17 to close at $105.42 a barrel.
Brent North Sea crude for delivery in November tumbled $1.88 to settle at $108.19 in London trade.
It was the second straight day of sharp price drops. Both benchmark contracts shed about $1.60 on Monday after a US-Russia deal over the weekend to dismantle Syria's chemical weapons eased crude supply fears.
"Oil markets continue to retreat in the wake of the agreement between the US and Russia to work to eliminate Syria's stockpile of chemical weapons," said Addison Armstrong of Tradition Energy.
"The announced resumption of some oil production in Libya is also weighing on the market after the state-run news agency reported that output of over 400,000 bbls/d (barrels per day) from two fields had resumed," Armstrong wrote in a research note.
Worker protests at the fields since July had crippled Libyan production.
Traders also awaited the outcome of the Fed's monetary policy meeting.
The US central bank's policymakers are widely expected wrap up a two-day meeting Wednesday with an announcement of the start of a reduction in its massive asset-purchase programme.
"Further falls may be seen should the US Federal Reserve decide to wind up its stimulus programme, which analysts expect to be announced," said Inenco analyst Joe Conlan.
"This would strengthen the dollar and help to further suppress prices."