Oil prices edged lower on Tuesday, extending the previous session’s losses, after US President Donald Trump said military action against Iran was not necessary “at this point”. His remarks eased concerns over prolonged disruptions to oil supplies from the Middle East.Brent crude futures fell 24 cents, or 0.23%, to $92.33 a barrel by 0102 GMT, while US West Texas Intermediate (WTI) crude futures declined 35 cents, or 0.40%, to $86.50 a barrel.Brent had settled 5.85% lower in the previous session after falling to its lowest level since August 31.
Trump signals pause in strikes, but Hormuz blockade to continue
Trump said on Monday that he planned to hold off on fresh military strikes against Iran for the time being, following appeals from countries in the region. These included an appeal from Qatar’s prime minister during talks at the White House.In an interview with Reuters and a subsequent appearance in the White House briefing room, Trump said the US would maintain its naval blockade in the Strait of Hormuz for now.“The market continues to prioritise President Trump’s more conciliatory tone toward Iran since the midterms,” said Tim Waterer, chief market analyst at KCM Trade.He added that attacks on shipping around the Strait of Hormuz were continuing but had not escalated enough to bring a fresh risk premium into the market.However, senior US and Gulf officials have expressed doubts about the possibility of an imminent peace deal between Washington and Tehran.Iranian security council chief Mohsen Rezaei rejected reports of negotiations, saying the US should “stop manufacturing fake news about imaginary talks”.He added that it was “time to surrender to the seven conditions Iran has repeatedly set out”.
Opec output rises, Russia-Ukraine talks in focus
On the supply side, oil production by the Organisation of the Petroleum Exporting Countries (Opec) increased in October, according to a Reuters survey. The rise was led by higher output in Saudi Arabia, Kuwait and Iraq, despite continued constraints on exports.Elsewhere, Russian and Ukrainian officials were scheduled to meet on Tuesday for two days of US-brokered talks. The meeting would be their first since February.Trump had suggested last week that a broader peace agreement could be possible in the 4.5-year-old Russia-Ukraine war and could also incorporate Europe’s security.
