NEW YORK: Oil prices eased on Monday to their lowest level in 12 days, as investors hoped for diplomatic progress on the Iran war due to this week’s United Nations meeting and eyed a partial recovery in shipments from Saudi Arabia.
The Brent crude futures November contract settled at USD100.34 a barrel, down USD3.53, or 3.4 percent. The WTI October contract that is expiring on Tuesday fell USD4.52, or 4.51 percent, to USD95.78 a barrel. The November contract stood at USD92.47. Both benchmarks fell to their lowest since September 9.
On Sunday, Iran and the US exchanged new threats, although President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the United Nations General Assembly.
Investors are pinning their hopes on a breakthrough in peace talks this week, said Tamas Varga, analyst at PVM Oil Associates.
“Just a couple days ago that would have seemed like a very far-flung idea,” said Bob Yawger, director of energy futures at Mizuho. “It’s a move in the right direction.”
Iran has conveyed its conditions to mediators for re-engaging in negotiations, Al Jazeera reported, citing Iran’s security chief, Mohsen Rezaei.
Fighting in the Middle East continued as Yemen’s Houthis said they had attacked Riyadh as well as a Saudi Aramco facility in the Red Sea city of Yanbu, while pushing to cut off the Red Sea coast from remaining areas held by Saudi-backed forces.
China has asked Iran to help rein in the Houthis after an appeal to Beijing by Saudi Arabia following the attacks, according to three Iranian sources familiar with the matter. The attacks by the Houthis on Aramco’s East-West pipeline have prompted the firm to increase exports through the Strait of Hormuz this month and next after halting some shipments via Yanbu.
Expectations of a partial recovery in shipments from Saudi Arabia further weighed on prices.
Saudi Aramco loaded about 14 million barrels of crude oil on seven supertankers inside the Mideast Gulf on Sunday, tanker tracking data showed.
Satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million barrels per day over the past six days, up from just 700,000 bpd in August. Meanwhile, Libya’s National Oil Corp Chairman Massoud Suleman told Reuters on Monday that the country’s Sharara oilfield has seen a partial reduction in production, without giving a reason.
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