LONDON: Oil dipped on Thursday after Iran's president said his country was not seeking war with any other nation, helping unwind a risk premium and foster speculation of a recovery in oil exports to the West.
Oil fell even as other commodities and equities were boosted after the United States surprised markets by keeping its monetary stimulus programme intact.
Brent crude for November delivery fell 70 cents to $109.90 a barrel by 1331 GMT, while US crude was down 36 cents at $107.71.
Brent and US oil rose the most in three weeks in the previous session as the US Federal Reserve's unexpected decision to delay the wind-down of its massive monetary stimulus weakened the dollar and stoked demand for risky assets.
Early gains from oil were erased, however, after new Iranian President Hassan Rouhani vowed on Wednesday his government would never develop nuclear weapons, his strongest signal yet that he may be seeking a diplomatic thaw with the West after decades of acrimony.
"Crude oil has to trade between Fed relief and Iranian belief," said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland.
A more conciliatory tone from Iran has kindled hopes that sanctions on its oil, previously OPEC's biggest after Saudi Arabia, will be eased, improving the global supply picture.
Easing fears of a US-led military strike on Syria also helped to dampen prices, with Western powers meeting for a second day of talks on their draft resolution on eradicating Syria's chemical arsenal.
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