Oil slips below $98 as Trump signals restraint on Iran
What's the story
Oil prices continued their downward trend on Monday after witnessing the biggest weekly drop since April 2020. The Brent futures fell below $98 per barrel in early Asian trading, building on a loss of over 16% last week. Meanwhile, US West Texas Intermediate (WTI) hovered around $90 per barrel. The decline is largely attributed to Washington's diplomatic efforts and recent geopolitical tensions in West Asia.
Market reaction
US midterm elections impact oil prices
The recent fall in crude prices from a six-month high at the end of October is mainly due to the US midterm elections.
A Democratic victory has led traders to believe that the US-Iran conflict may not escalate further, which has significantly impacted oil prices.
President Donald Trump said on Sunday that the US is "highly unlikely" to go back to war with Iran, as long as talks make headway on Tehran's nuclear facilities and reopen the Strait of Hormuz.
Geopolitical tensions
Geopolitical tensions keep oil prices volatile
The Houthi rebels from Yemen launched a missile attack on the Saudi capital Riyadh, damaging the offices of state oil giant Saudi Aramco.
The damage was minor and no casualties were reported.
Meanwhile, Ukraine struck a sixth Russian oil refinery in a week, further adding to the uncertainty in crude prices.
These geopolitical tensions are likely to keep oil prices volatile for some time.