Brent crude oil fell in volatile trade on Friday ahead of a long weekend in the United States as the Obama administration made a case for a "limited" strike against Syria.

Oil prices fell, rebounded, then fell again during U.S. Secretary of State John Kerry's televised address as traders watched for signs of what the administration might do.

Kerry released evidence that the Syrian government had used chemical weapons against civilians multiple times in the past year and said the "indiscriminate, inconceivable horror" could not go unpunished.

After Kerry spoke, Obama said the United States was still in the planning process for a response to the chemical weapons use in Syria, that would not involve an open-ended commitment or major military operation.

Oil markets had been concerned the crisis in Syria could spill over into other nations in the Middle East, disrupting oil supplies, especially if the United States conducted a large strike.

"It's clear there's going to be a military strike of some kind, but it became clear that it's going to be limited in scope and that's why we sold off," said John Kilduff, partner at Again Capital LLC.

Brent crude for October fell $1.15 to settle at $114.01 a barrel, after earlier reaching a low of $113.63 prior to Kerry's speech. Brent gained 2.7 percent a barrel over the past week.

U.S. crude for October delivery fell $1.15 to settle at $107.65 a barrel after hitting a low of $106.75, finishing the week up 1.2 percent.

U.S. refined products, which expire today, led the decline, with contracts for gasoline and heating oil down more than 1.3 percent.

Traders said some selling on Friday was also linked to the long Labor Day weekend in the United States, with investors looking to close out positions ahead of the three-day weekend.


As the U.S. mulled action against Syria, market participants kept one eye on supply issues in the Middle East and elsewhere.

The U.S. Energy Information Administration has said global supply disruptions reached 2.7 million bpd in July, and analysts say outages have risen since then.

Libya's crude exports have shrunk to just over 10 percent of capacity from three ports, out of a possible nine, as armed groups have tightened their grip on its major industry. Maintenance in Iraq in September is also expected to cut supplies.

Increased production by Saudi Arabia and the possibility of an emergency oil stocks release by the International Energy Agency (IEA) could offset the disruption.

Supply from the Organization of the Petroleum Exporting Countries has averaged 30.32 million barrels per day (bpd), down from a revised 30.50 million bpd in July, a Reuters survey of shipping data and sources at oil companies, OPEC and consultants found.

Oil prices were still on track for their biggest monthly gain in a year, with Brent up nearly 6 percent in August, after unrest cut output in Libya by around 1 million barrels per day (bpd) and production fell in Iraq, Nigeria and elsewhere.

Upward momentum for prices appeared to stall after Britain's Parliament defeated a proposal by Prime Minister David Cameron that could have led to UK involvement in a strike against Syria.

(Additional reporting by David Sheppard in New York, Christopher Johnson in London and Florence Tan in Singapore; editing by Andrew Hay, Marguerita Choy and John Wallace)