The price of crude oil rose to near $104 a barrel Wednesday, stabilizing after a recent string of losses.
By early afternoon in Europe, benchmark oil for November delivery was up 68 cents to $103.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 46 cents to finish at $103.13 a barrel on Tuesday, the lowest close since July 30. Oil has dropped over 6 percent since closing at a two-year high of $110.53 on Sept. 6.
Just a few weeks ago, President Barack Obama was considering launching a military strike against Syria to retaliate for a chemical weapons attack on Aug. 21 that the U.S. blamed on Bashar Assad's regime. But a U.S.-Russia deal to put Syria's chemical weapons under international control averted military action, at least for now.
Obama has called on the U.N. Security Council to pass a resolution that would enforce consequences on Syrian President Bashar Assad if he fails to follow the U.S.-Russian deal to turn his chemical weapon stockpiles.
Echoes of an apparent turn for the better in relations between Western powers and Iran — usually tense partly because of the Islamic Republic's nuclear program — have also weighed on oil prices recently.
"Even though a quick easing of the West's oil sanctions against Iran is not probable, the diplomatic thaw does point to a declining risk premium," analysts at Commerzbank in Frankfurt wrote in a note to clients.
Meanwhile, U.S. economic indicators continue to provide mixed messages. On Tuesday, new figures showed U.S. durable goods orders increased 0.1 percent in August, thanks largely to greater demand for cars, suggesting demand for fuel will remain firm. But the small increase followed a big slump in July.
Investors are also remaining cautious as Congress in Washington gears up for a budget fight. Failure to reach an agreement could make it impossible for the government to pay some of its bills. In other markets, Brent crude, the benchmark for international crudes used by many U.S. refineries, rose 85 cents to $109.49 a barrel on the ICE Futures exchange in London.
On the Nymex: — Wholesale gasoline rose 2.1 cents to $2.668 per gallon. — Natural gas rose 3.3 cents to $3.525 per 1,000 cubic feet. — Heating oil rose 2.2 cents to $2.982 per gallon.
Pamela Sampson in Bangkok contributed to this report.