Oil prices fell by more than 1% on Monday after Iranian and Qatari officials met for a third day in a row. The talks are aimed at finding a deal to end the war that the United States and Israel are fighting against Iran.
By 0011 GMT, Brent crude futures had dropped $1.59, or 1.40%, to $111.84 a barrel. US West Texas Intermediate crude fell $1.56, or 1.50%, to $102.56 a barrel.
Brent had closed October at its highest level in six months. Traders were worried that the conflict between the US and Iran could flare up again after the US midterm elections on Tuesday.
Technical pullback after strong gains
Tim Waterer, chief market analyst at KCM Trade, said Monday’s fall was a technical pullback after the sharp gains of last week. He said hopes of some diplomatic progress, along with the lack of any major military escalation over the weekend, had taken some of the immediate heat out of prices for now.
He cautioned, however, that the market remains alert. Rhetoric around Iran could get sharper after the midterm elections, he said, and that could push crude prices higher again.
Talks continue
Iranian Foreign Minister Abbas Araqchi said on Sunday that the talks were continuing and making progress. He described their purpose as keeping up consultations with the Qatari mediators. He added that Tehran is prepared for both defence and diplomacy.
The discussions come at a time when attacks on oil tankers passing through the Strait of Hormuz are pushing up global energy and shipping costs.
Saudi exports rise
Saudi Arabia raised its crude exports in October compared with September, even though the Iran-aligned Houthis in Yemen attacked its energy infrastructure. Two of three ship-tracking companies reported this.
OPEC+ holds output steady
The Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC+, left their December production targets unchanged on Sunday. The decision matched expectations that no further policy changes would come before next year.
The group is still struggling with export disruptions caused by the war in Iran.
What to watch
Traders will be watching two things this week. One is whether the Iran-Qatar talks lead to anything concrete. The other is how the rhetoric around Iran evolves once the US midterm elections are over. Both could decide whether oil extends Monday’s dip or resumes the climb that took Brent to a six-month high.
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