Oil prices hit two-month lows as US downplays further Iran strikes
USO•Oil prices fell about 2% to two-month lows after US officials played down the need for additional military action against Iran. Brent fell 2.1% to $90.64 a barrel and US crude dropped 1.7% to $85.41.
1. Crude prices fall
Oil prices slid about 2% on Tuesday, with both benchmarks on track for their lowest closes since August 28. Brent futures fell $1.93 to $90.64 a barrel, while US West Texas Intermediate crude dropped $1.44 to $85.41.
2. US signals restraint
Secretary of State Marco Rubio said US sanctions and a naval blockade were working well enough that President Donald Trump did not need major combat operations in Iran. Trump said he would hold off on new strikes for now but keep the Strait of Hormuz blockade in place. The market has focused on Trump's more conciliatory tone, KCM Trade analyst Tim Waterer said.
3. Other pressures on oil
Russian and Ukrainian officials met in Abu Dhabi for their first peace talks since February, while investors saw hotter-than-expected US consumer inflation as increasing the likelihood of a half-point Federal Reserve rate hike in December. Higher rates can reduce economic growth and oil demand.
