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Global oil prices fell on Monday amid hopes of easing tensions between the United States and Iran. However, concerns over supply disruptions persisted as attacks on key energy facilities in Saudi Arabia continued, raising fears of further market volatility, Reuters reported.
At 4:26 am GMT on Monday, US West Texas Intermediate (WTI) crude futures fell by $2.23, or 2.16 per cent, to $101.04 per barrel. Meanwhile, Brent crude futures, the international oil benchmark, declined by $2.21, or 1.89 per cent, to $114.51 per barrel.
On Friday, oil prices closed nearly $3 higher amid concerns that Houthi attacks in Saudi Arabia could disrupt energy supplies. On a weekly basis, Brent crude rose 6 per cent, while WTI gained 2.3 per cent.
As part of efforts to ease tensions in the Middle East, Qatari mediators visited Tehran on Sunday, according to an official familiar with the situation. The initiative was coordinated with the United States, the official said.
Vandana Hari, founder of oil market analysis firm Vanda Insights, said the risk of a fresh military escalation in the Middle East had eased somewhat on Monday morning. Fears of further escalation had been a major factor behind the rise in crude oil prices last week. However, she warned that the relief could prove temporary.
Hari said US President Donald Trump had yet to dispel market expectations that Washington could launch an attack on Iran after the November 3 midterm elections. As a result, oil market volatility is likely to remain elevated, with the risk of further price increases still high, she added.