Price of oil slips toward $103 per barrel

Picture of oil field pumps taken 28 July 2004 in Santa Cruz del Norte in Havana. Cuba, which has been in dire economic straits since the collapse of the former Soviet bloc which once flooded it with subsidized food and fuel, is eagerly awaiting news of the outcome of oil exploration off the island. The fact that the supply of Venezuelan oil - one third of what Cuba consumes - soon and just as suddenly could be cut off, would plunge Cuba into another economic black hole. That, if Venezuelan President Hugo Chavez, Castro's only close ally in the region, loses a referendum August 15 on cutting short his term in office and the opposition which has announced the flow of oil to Cuba would stop, comes out on top. AFP PHOTO/Adalberto ROQUE (Photo credit should read ADALBERTO ROQUE/AFP/Getty Images)

BANGKOK The price of oil slipped again Tuesday, a day after hitting a six-week low, as fears of a U.S.-led military attack on Syria faded.

Benchmark oil for November delivery was down 54 cents to $103.53 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.16, or 1.1 percent, to close at $103.59 on Monday. Oil has dropped 6.3 percent since closing at a two-year high of $110.53 on Sept. 6.

Some analysts said that apparent diplomatic progress over the elimination of Syria's chemical weapons and a seeming thaw in relations between Iran and Western powers were easing fears of a potential disruption in oil supplies.

The U.S. had threatened to attack Syria in retaliation for an alleged chemical gas attack against civilians. But the Obama administration has since said diplomats would be given a chance to convince Syrians to turn over their chemical weapons before deploying military force.

Carl Larry of Oil Outlooks and Opinions said "too much faith" was being put in Iran, which has agreed to participate in talks about its nuclear program with the U.S. and five other countries later this week at the U.N. The talks will be the highest level contacts between the U.S. and Iran in six years.

He said oil is likely to return to recent highs around $110 a barrel.

"This move lower will continue to fade," Larry said in a market commentary. "Make no mistake, oil prices will come back to the norm."

Brent crude, the benchmark for international crudes used by many U.S. refineries, fell 41 cents to $107.75 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

- Wholesale gasoline fell 1.3 cents to $2.602 per gallon.

- Natural gas lost 0.3 cent to $3.599 per 1,000 cubic feet.

- Heating oil retreated 1.7 cent to $2.94 per gallon.