U.S. crude fell below $100 a barrel on Monday after reports that both Washington and Tehran are seeking diplomatic options. Brent crude also dropped, while concerns over the Middle East and Ukraine conflicts are likely to linger.
Oil prices fell sharply early on Monday as reports emerged that the U.S. and Iran are both looking for a diplomatic route to end the Middle East conflict.
West Texas Intermediate futures for December declined 4.44% to $99.50 per barrel as of 5:49 a.m. ET. Brent crude futures for January fell 4.61% to $108.20 a barrel at the same time.
Washington and Tehran signal openness to talks
U.S. Secretary of State Marco Rubio said that President Donald Trump prefers not to use military force and would like to resolve the Iranian war through diplomacy. Rubio added that Trump has not made a decision.
Iranian authorities, for their part, signaled that a deal is still possible following two days of talks mediated by Qatar, as long as demands are implemented tangibly, according to Al Jazeera.
Military threats remain in the background
However, the diplomatic signals follow reports that both sides are preparing for more military strikes. The Wall Street Journal and The New York Times indicate that the U.S. is preparing for possible renewed military actions after the Nov. 3 midterm elections.
Iranian Supreme Leader Mojtaba Khamenei on Saturday called for Tehran's armed forces to meet any threat with "an immediate, impactful, and geographically unrestricted response."
Concerns over the Middle East and Ukraine conflicts will likely linger in the near term. Tamas Varga, analyst at PVM Oil Associates, said attacks on ships and refineries in the Middle East and on civilians in Ukraine continue, doing little to inspire confidence in lasting ceasefires.
Source: CNBC
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