Oil prices fell on Tuesday, with Brent crude down 1.7% to $90.99 a barrel from Monday’s $92.57 settlement, after US President Donald Trump downplayed further strikes on Iran.
US West Texas Intermediate (WTI) futures declined $1.65 to $85.20 a barrel from their previous settlement of $86.85. Both were recorded.
Brent had lost 5.85% in Monday’s session. That decline followed a 16% fall the previous week, its steepest weekly retreat since the start of the COVID-19 pandemic.
Trump said on Monday that he planned to hold off on further military strikes for now after appeals from regional countries. However, he intended to maintain the US naval blockade in the Strait of Hormuz.
In an interview with Reuters, Trump said Qatar and Saudi Arabia favoured a peaceful resolution, while stressing that US forces remained ready to act if necessary.
Shipping attacks continued to complicate the outlook. Both Washington and Tehran had reported incidents involving vessels in or near the strait, while Iran warned that renewed attacks would trigger strikes on US and Israeli targets.
Saxo Bank analyst Ole Hansen said on Monday that hopes for a peace agreement, rather than firm evidence of progress, were driving prices lower. He linked further selling pressure to Trump’s assessment that fresh strikes were unlikely.
Meanwhile, UBS analyst Giovanni Staunovo pointed to weakness in the physical oil market and continued elevated flows from the Middle East.
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Tim Waterer, chief analyst at KCM Trade, questioned whether Trump’s softer language represented a lasting policy shift after the US midterm elections. He cautioned against treating a change in tone as a settled approach to the conflict.
Supply projections added to the pressure. In a November 6 report, JPMorgan estimated that global production exceeded consumption by 1.1 million barrels per day in September, widening to 1.4 million barrels per day in October.
The bank attributed the emerging surplus to recovering Middle Eastern flows, higher production elsewhere and weak demand.
