Oil prices slumped to a 10-week low on Monday after US President Donald Trump said it was "highly unlikely" the US would renew attacks on Iran. Brent crude fell as much as 5.6 per cent to $92.80 a barrel, its lowest level since September 1, while West Texas Intermediate dropped 3 per cent to $84 a barrel. Trump told CNN on Sunday that a decision on renewing strikes would depend on whether Iran signs "a very strong agreement." "Trump clearly prefers a diplomatic solution," said Global Risk Management chief analyst Arne Rasmussen.
While a substantial gap remains between the two sides, oil prices reacted to a shift in expectations. Monday's falls extend a broader market sell-off triggered by Republicans' defeat in last week's US midterm elections, which voters viewed as a signal to end the Iran war. Energy Aspects analysts Amrita Sen and Daniel Sternoff noted Iran is unlikely to offer new concessions knowing Congress may cut war funding in months.
Dated Brent, Europe's physical oil price, fell more sharply than futures, trading at $92.25 a barrel, cheaper than January delivery. Despite the diplomatic outlook, attacks on Middle Eastern shipping continued, with the UK Maritime Trade Operations reporting a tanker hit in the Strait of Hormuz on Saturday.
Source: Financial Times Markets · Summarized by HeadlinesBriefing