WASHINGTON (dpa-AFX) - Fully wiping out the gains from last week, crude oil prices have gone into a tailspin on Monday after U.S. President Donald Trump downplayed the possibility for fresh strikes on Iran that diminished supply disruption concerns.
WTI Crude Oil for December delivery was last seen trading down by $3.25 (or 3.58%) at $87.58 per barrel.
Qatar's Prime Minister Sheikh Mohammed bin Abdulrahman is in the U.S. hold intensive 'closed door' discussions with Trump as well as with U.S. Vice President JD Vance at the White House.
Reuters reported (citing an unnamed U.S. official) that Vance is also scheduled to discuss the Iran crisis with Qatar's Foreign Minister Sheikh Mohammed.
With the support of neighboring Arab nations, Qatar is acting as an intermediary to bring the U.S.-Iran conflict to a permanent end.
Over the past couple of weeks, a section of media reported about the possible re-launch of attacks on Iran by the U.S. on a much bigger scale than before, soon after the November midterm elections. Undeterred Iran, expressed its readiness to face any attack.
Qatar has been facilitating the exchange of draft proposals and revised proposals between the U.S. and Iran for several months.
Israel Hayom reported that Qatar's PM would be presenting a proposal to the U.S., endorsed by Iran, to reopen the Strait of Hormuz if the U.S. administration agrees to lift its blockade on Iran and release $8 billion worth of Iran's assets blocked in foreign countries.
After the election results revealed a majority to the Democrats in both houses of the U.S. Congress, Trump admitted that Iran war was partly a reason for the debacle.
More candidly, Vance conceded that the war had been the primary cause for voters tilting their support in favor of Democrats.
Since the start of war in February, the Strait of Hormuz has remained closed by Iran. As a result, energy prices went through the roof in the U.S., pushing households to scramble for money to meet their other essential expenditure.
Trump did not disclose his plans on Iran until Saturday but in an interview with CNN, which was aired late Sunday, he stated that if the current peace talks show progress, a renewal of strikes would be highly unlikely.
Trump stuck to his oft-repeated stance that Iran is failing both military-wise and financially.
Energy markets welcomed the message but with cautious optimism as Trump's comments are more seen as a measured step rather than a concrete finalization of his plans. However, the expectations of a deal were sufficient to bring down oil prices.
Middle East tensions were kept alive after an attack on the Aramco Tower, a skyscraper in Saudi Arabia's Riyadh business zone, on Saturday. Yemen's Houthi militants claimed targeting the Saudi Arabian capital's central financial district without naming the building.
Meanwhile, attack on tankers attempting to transit the Strait of Hormuz continued with both the Islamic Revolutionary Guards Corps and U.S. Central Command claiming to have attacked vessels that did not comply with their respective navigational guidance.
CENTCOM confirmed disabling a St. Kitts and Nevis-flagged bulk carrier, Huda, in the Gulf of Oman on Saturday as it violated the U.S. naval blockade on Iran.
On Friday, analysts from JP Morgan warned of an oil glut as the demand destruction due to soaring oil prices is pushing the global crude oil market towards over-supply.
JP Morgan estimated that the market returned to a surplus of 1.10 million barrels per day in September, which increased to 1.40 million bpd in October.
The U.S. dollar index was last seen trading at 101.80, down by 0.49 (or 0.48%) today.
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