Oil falls as Trump signals restraint on Iran despite fresh shipping attacks
USO•Brent crude fell 1.7% to $96.67 a barrel and U.S. West Texas Intermediate dropped 1% to $89.87 after Donald Trump said he was highly unlikely to order fresh strikes on Iran while talks progressed. Brent fell 16% last week, its steepest weekly drop since the start of the COVID-19 pandemic.
1. Oil prices drop
Brent crude fell $1.65, or 1.7%, to $96.67 a barrel by 0830 GMT on Monday, while U.S. West Texas Intermediate lost 96 cents, or 1%, to $89.87. Brent plunged 16% last week for its steepest weekly percentage drop since the start of the COVID-19 pandemic.
2. Conflict and supply risks
Trump said he was highly unlikely to order fresh attacks on Iran as long as talks to end the conflict progressed. Attacks on ships in or near the Strait of Hormuz kept supply concerns in focus. The Houthis claimed responsibility for an attack on Saudi Aramco's offices in Riyadh, while a Ukrainian drone attack set fire to Russia's Kirishi oil refinery, the regional governor said.
3. Supply outlook
JPMorgan estimated that global oil supply exceeded consumption by 1.1 million barrels per day in September, with the surplus widening to 1.4 million barrels per day in October. The bank cited recovering Middle Eastern oil flows, rising production elsewhere and weak demand.
