Oil prices extended their decline on Wednesday as investors weighed prospects of improved global supply following the resumption of operations on a critical pipeline in Saudi Arabia, while hopes of diplomatic efforts to end the United States-Iran conflict also pressured prices.
Brent crude futures fell $1.09, or 1.1 per cent, to $98.16 a barrel as of 0421 GMT, while US West Texas Intermediate (WTI) futures dropped $1.50, or 1.67 per cent, to $89.01 a barrel.
Both benchmarks have now declined for six consecutive sessions, trading around two-week lows.
US President Donald Trump on Tuesday warned that he could “annihilate” Iran but also disclosed that his envoys, Steve Witkoff and Jared Kushner, had held what he described as productive discussions with Iranian mediators aimed at ending the conflict.
“I think there’s a lot of momentum for them to make a deal,” Trump said.
The prospect of increased oil supplies, combined with renewed diplomatic efforts to end the nearly seven-month conflict, pushed Brent crude below $100 a barrel at Tuesday’s close for the first time since September 8.
Tim Waterer, chief analyst at KCM Trade, said the oil market was becoming more optimistic about the global supply outlook than it had been in recent weeks.
“The market is currently feeling more constructive about the global oil supply picture than it was a few weeks ago,” Waterer told Reuters.
He added that the meeting between US and Iranian delegations in New York had provided traders with renewed hope of a diplomatic breakthrough.
“Despite the continued tough rhetoric, including threats of ‘annihilation,’ the market is choosing to price in the possibility of talks,” he said.
