Oil fell nearly 4% on Monday as talks between Iranian and Qatari officials on ending the war raised hopes that Middle East supply disruptions could ease. Analysts still see upside risks, and Goldman Sachs raised its price forecasts.
Oil fell nearly 4% on Monday as talks between Iranian and Qatari officials on a deal to end the US-Israeli war on Iran raised hopes that Middle East supply disruptions could ease.
Brent crude futures fell $4.20, or 3.7%, to $109.23 a barrel by 0900 GMT. US West Texas Intermediate traded at $100.14, down $3.98, or 3.8%.
Doha talks lift hopes of a breakthrough
Iranian negotiators left Doha talks on Sunday, but not due to difficulties in negotiations, an official briefed on the meeting told Reuters on Monday. Iranian Foreign Minister Abbas Araqchi said on Sunday that the purpose of the ongoing and progressing talks was to continue consultations with the Qatari mediators.
Tamas Varga of oil broker PVM said: "The new month brought with it renewed hopes of a breakthrough in the Iranian stalemate."
Tim Waterer, chief market analyst at KCM Trade, said lingering hopes of diplomatic progress and the absence of any meaningful military escalation over the weekend have taken some of the immediate heat out of prices for now.
Supply risks remain
The talks follow a recent increase in attacks on oil tankers transiting the Strait of Hormuz, although there are also signs of shipments rising from some major exporters. In October, Saudi Arabia increased crude exports versus September despite attacks by the Iran-aligned Yemeni Houthis on its energy infrastructure, according to two of three ship-tracking companies.
Brent ended October at its highest in six months amid concerns that the US-Iran conflict could escalate again after Tuesday's US midterm elections.
The war, which began at the end of February, has depleted oil stocks. The CEO of Abu Dhabi's state-owned oil company ADNOC said the world has drained nearly 1 billion oil barrels from inventories since the war disrupted shipping through the Strait of Hormuz.
Some analysts say oil could still rise further. Goldman Sachs raised its oil price forecasts on Sunday due to elevated supply risks, and said Brent could jump to $140 in 2027 if Gulf oil output stays 3.5 million barrels per day below its 2025 average.
Source: Investing.com
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