Oil prices fall as diplomacy hopes rise
- Crude oil prices declined to one-week lows as traders reacted to hopes of a possible Middle East diplomatic resolution.
- Brent crude traded at $102.05 per barrel, while WTI crude fell to $98.50 per barrel.
- Markets also monitored Saudi Arabia’s redirected oil flows through the Strait of Hormuz.
Brent crude and West Texas Intermediate oil prices declined to their lowest levels in about a week as traders responded to renewed hopes for a diplomatic solution to the Middle East conflict.
Brent crude was trading at $102.05 per barrel, while U.S. West Texas Intermediate crude changed hands at $98.50 per barrel as investors watched developments around a United Nations meeting.
“Some 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,” said Tim Waterer, chief market analyst at KCM Trade.
The decline came despite continued tensions in the region, including renewed threats between the United States and Iran and attacks by Yemen’s Houthi movement against Saudi Arabia, while Saudi Arabia increased oil flows through the Strait of Hormuz.
Following the decline, Brent crude was trading at $102.05 per barrel and WTI crude was trading at $98.50 per barrel.
Oil markets continued to monitor Middle East developments because the region contains key energy supply routes and major oil-producing countries.
Saudi Arabia’s oil exports through the Strait of Hormuz reportedly increased to 2.9 million barrels per day over the past week, compared with 700,000 barrels per day in August, according to JP Morgan.
