Brent crude oil steadied around$114 on Monday, after a week of gains, as a military strike against Syria looked less imminent and worries over possible Middle East supply disruptions receded.
U.S. President Barack Obama said he would seek congressional authorisation for punitive military action against Syria, almost certainly delaying any air strikes until Washington's summer recess ends on Sept. 9.
Oil got a boost, meanwhile, from improved factory activity in China and the euro zone,which stoked hopes of a revival in economic growth and oil demand growth.
Brent futures fell as low as $112.20 a barrel, down $1.81, but then rallied to around $114.45 by 1140 GMT. The U.S. benchmark in NYMEX after-hours trade plummeted to a low of $104.21, down $3.44, before bouncing back to around $107.10.
U.S. oil futures floor trading was closed on Monday for the Labor Day public holiday.
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"Oil would have been pushed lower had it not been for the China data," said Ben Le Brun, a market analyst at OptionsXpress. "The market is keeping an eye on the Middle East and developments in Syria, but we have seen some tensions easing."
Brent rose nearly 3 percent last week, its biggest weekly gain since July, on worries a strike by Western forces against Syria would disrupt Middle East oil exports at a time when markets are already coping with the loss of supplies from Libya and Sudan.
Before Obama announced his plan to seek approval from Congress, the path had been cleared for a U.S. assault. Warships were in place and awaiting orders, and U.N.inspectors had left Syria after gathering evidence on the use of chemical weapons.
The United States had originally been expected to lead a strike relatively quickly, backed by Britain and France. But British lawmakers last week voted against involvement, and France said on Sunday it would await the decision by the U.S.Congress.