Oil prices slid towards the psychological threshold of $100 a barrel and to their lowest in 11 days on Monday as investors hoped for diplomatic progress on the Iran war due to this week’s UN meeting, and eyed a partial recovery in shipments from Saudi Arabia.
Brent crude futures and US West Texas Intermediate crude touched their lowest since September 10 earlier on Monday.
The Brent contract for November was at $101.2 a barrel at 1137 GMT, down $2.66, or 2.6%, after settling 0.91% lower on Friday.
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US West Texas Intermediate crude lost $2.15, or 2.14%, to $98.15 a barrel following a 1.58% drop in the previous session.
“It seems that a degree of risk premium is being removed from oil prices on hopes that a diplomatic path to de-escalate the US-Iran war may arrive this week,” Tim Waterer, chief market analyst at KCM Trade, said.
“Whether that hope proves to be warranted or not is another question. Time will tell.”
The WTI broke a key psychological support at $100 a barrel while some investors may have rolled over their positions in the October contract a day ahead of expiry to November, a Singapore-based broker said.
Iran and the US exchanged new threats on Sunday amid the stalemate, 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.
Iran has conveyed its conditions to mediators for re-engaging in negotiations aimed at ending the war with the US, Al Jazeera cited Iran’s security chief, Mohsen Rezaei, as saying in an interview on Saturday.
However, tensions in the Middle East remained elevated as Yemen’s Iran-backed Houthis said they attacked “sensitive” sites in the Saudi capital of Riyadh on Saturday with missiles and drones, as well as an Aramco facility in the Red Sea city of Yanbu, a key oil export hub.