NEW YORK — Oil dropped nearly 2 percent Tuesday as support grew behind a plan for Syria to cede possession of its chemical weapons and avoid a military strike by the U.S.
Benchmark oil for October delivery fell $2.13, or 1.9 percent, to close at $107.39 a barrel on the New York Mercantile Exchange. It was the biggest one-day decline in three weeks.
Oil prices have been at elevated levels for two weeks following President Barack Obama's call for military action against the government of Syrian President Bashar Assad in retaliation for what the White House says was a chemical weapons attack against civilians.
But on Tuesday, a diplomatic solution seemed at hand after Syria said it had accepted a deal pushed by Russia – and based on comments by U.S. Secretary of State John Kerry – to put its chemical weapons under international control for their later dismantling.
Obama threw his support behind a French resolution to the U.N. Security Council even as he pushed the idea of U.S. airstrikes against Assad's regime if that effort fails.
As the Syrian situation develops, traders will be also monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending Sept. 6 is expected to show declines of 2 million barrels in crude oil stocks and 1 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration – the market benchmark – will be out on Wednesday.
At the pump, the average price for a gallon of gasoline slipped to $3.56 a gallon. That's down 3 cents from a week ago and is 27 cents cheaper than at this time last year.
Brent, the benchmark for international crudes, dropped $2.47, or 2.2 percent, to $111.25 per barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
_ Wholesale gasoline fell 7 cents to $2.74 per gallon.
_ Natural gas lost 2 cents to $3.58 per 1,000 cubic feet.
_ Heating oil retreated 5 cents to $3.07 per gallon.
Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.