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Tokyo - Brent crude futures stayed above $111 a barrel on Thursday as investors waited to see whether diplomatic efforts to eliminate 's chemical weapons would avert the threat of US military action that could lead to a disruption of oil supplies.
Diplomatic efforts to place 's chemical weapons under international control intensified on Wednesday, while UN rights investigators detailed what they called war crimes carried out largely by forces in the civil war.
US Secretary of State and Russian Foreign Minister are to meet later on Thursday in to talk about 's chemical weapons arsenal.
"Traders are reluctant to change their positions as the outlook for 's problem remain uncertain," said , an analyst at Daiichi Commodities. "Everyone is closely watching how 's situation will develop."
Brent crude for October was trading up 2 cents at $111.52 a barrel by 08:47, after gaining 25 cents the previous day. Brent hit a six-month high of $117.34 a barrel on August 28, largely on the tensions over .
US crude was 2 cents lower at $107.54.
But with many of the factors that pushed oil prices higher now out the market, industry players said it looked tough for the futures contracts to move higher.
"If you take into consideration the end of (summer) drive time, the dead hurricane season and softening tensions in , oil at this level is too expensive," said , Chief Investment Officer at .
Gasoline stocks rose unexpectedly last week, data from the showed on Wednesday, indicating that demand supported by the summer driving season had ended.
In addition, several members of the Organization of the Petroleum Exporting Countries said at an industry event in that the oil market is well balanced and there is no need to pump more for now.
Eyes on Fed
Expectations are growing that will decide next week to begin tapering its monetary stimulus, although last Friday's disappointing US jobs data has convinced many economists that any reduction might be smaller than some had believed.
Still, any cut in the Federal Reserve's bond-buying programme would likely boost the dollar and pressure oil and other commodities priced in the greenback.
The dollar dropped to two-week lows against a basket of major currencies on Thursday, as markets continued to chip away at its recent gains on growing doubts the Federal Reserve will scale back stimulus in any significant way next week.
