(MENAFN - AFP) Global oil prices fell heavily on Monday after a US-Russia deal on Syria's chemical weapons avoided a Western military strike against the regime, easing crude supply fears, traders said.
Brent North Sea crude for delivery in November sank 1.92 to stand at 109.78 a barrel in London midday trade.
New York's main contract, West Texas Intermediate for October, lost 1.39 to 106.82 a barrel.
"Brent prices have fallen back ... as a deal between the US and Russia regarding the removal and disposal of (Syria's) chemical weapons supplies was reached," said analyst Joe Conlan at British-based energy consultancy Inenco on Monday.
US Secretary of State John Kerry and his Russian counterpart Sergei Lavrov reached a breakthrough deal Saturday after three days of talks in Geneva.
Under the agreement, Syrian President Bashar al-Assad's regime has a week to hand over details of the quantity and location of all its toxic arsenal.
The stockpile would then be turned over to international supervision and destroyed by mid-2014.
The deal has won backing from China, a veto-wielding permanent member of the UN Security Council.
Analysts said the accord has averted a possible US-led strike on Syria to punish it for its alleged use of chemical weapons on its own people.
"The risk premium on crude prices over Syria continues to subside after the US-Russia agreement on Saturday," Victor Shum, managing director at research group IHS Purvin and Gertz told AFP.
Oil future last month hit multi-month highs on fears that the US would press ahead with a punitive military strike on Syria, in a move which could spark a wider conflict in the crude-rich Middle East.
Analysts warned Monday that the oil market could fall further as traders await the outcome of this week's key Federal Reserve monetary policy meeting.
The US central bank's policymakers are widely expected to begin tapering or winding down the bank's stimulus programme, known as quantitative easing (QE).
The gathering of the Fed's Federal Open Market Committee (FOMC) starts on Tuesday and concludes on Wednesday.
The Fed is pumping out 85 billion a month via bond purchases to boost help growth in the US economy, which is also the world's biggest oil consumer.
"This Tuesday and Wednesday will provide us with vital clues as to when, and by how much, the Fed might reduce its 85-billion asset purchase programme," said Tamas Varga, analyst at oil brokers PVM.
"Barring any other significant developments this will set the direction for the oil and stock markets for the coming week."