Brent Crude Drops Below $90 as US-Iran Favour Negotiation
Brent crude fell below $90 a barrel on Tuesday as hopes that tensions between the US and Iran could ease helped calm fears of oil supply disruptions in the Middle East.
International benchmark Brent crude futures for January delivery fell about 2.9% to $89.89 a barrel, down from the previous close of $92.57.
US benchmark West Texas Intermediate (WTI) crude futures for December delivery dropped 2.8% to $84.34 a barrel, down from $86.85 at the previous close.
Brent had ended the previous session down more than 5%.
US President Donald Trump said Monday that further military action against Iran did not appear necessary at this stage, while warning that Washington remained prepared to act if the situation changed.
“At this point, taking the military action doesn’t seem to be a very necessary thing — but we’re locked and loaded, ready to go for any reason,” he told reporters at the White House.
Trump added that Israel and the wider Middle East were protected from the Iranian “danger and threat.”
“We’re seeing momentum toward the end of this conflict. I think it’s going to be ending fairly soon,” he said. He said the US “is just keeping it the status quo.”
Trump said he hoped the US could reach a deal with Iran.
“But nothing’s going to happen. And if we have to, we’ll take it very seriously. We are so loaded. We just have another aircraft carrier. It’s all loaded up to the gills with brand-new, beautiful stuff,” he said. “And hopefully, we don’t have to use them.”
His remarks eased concerns about potential disruptions to Middle East oil shipments, putting downward pressure on crude prices.
Markets are also awaiting the US Energy Information Administration’s (EIA) Short-Term Energy Outlook report later Tuesday for fresh forecasts on global oil supply, demand and prices.
