05 September 2013, News Wires – Brent oil futures fell slightly and US crude oil pared gains in a wide commodities selloff on Thursday after strong US economic data hinted that the Federal Reserve could be closer to unwinding its massive stimulus programme that has boosted commodities prices.
Brent had held above $115 a barrel for most of the session after US President Barack Obama won some support from lawmakers for a military strike on Syria, adding to concerns that Middle East supply disruptions would persist.
Data showing the pace of growth in the US services sector accelerated in August to its fastest pace in almost eight years sparked selling in both crude benchmarks.
It came on the heels of earlier news that private employers added 176,000 jobs in August and new claims for jobless benefits fell to a near five-year low last week.
“The economic data that came out at 10am was so positive that it makes the argument for tapering” of Fed stimulus, John Kilduff, partner at Again Capital LLC in New York told Reuters.
“It’s a generalized commodities selloff because we anticipate the loss of monetary support.”
Brent crude fell 13 cents to $114.78 a barrel by 1430 GMT after an earlier high of $115.55.
US oil gained 30 cents to $107.53 a barrel after earlier reaching $108.17.
Investors expect any strike on Syria to be limited. The Senate Foreign Relations Committee voted in favour of a resolution that sets a 60-day limit on any engagement in Syria, with a possible 30-day extension, and bars the use of US troops for ground combat.
While Syria is not a big oil producer, markets are already struggling to cope with the loss of supplies from a region that pumps a third of the world’s crude. Outages in the Middle East and Africa have surpassed 3 million barrels per day, or about 3.5% of global demand.
Libya’s oil exports have shrunk to just over 10% of capacity from three out of a possible nine ports as armed groups have tightened their grip on oil facilities.