EconomyEnergy
Oil slips 1.4% in early Asian trade as Iran says Qatar talks are 'progressing'
Brent fell to $111.84 a barrel as trading opened on Monday, giving back part of last week's rally. Analysts warn the relief may be brief, with the US midterm vote on Tuesday and tanker attacks still disrupting the Strait of Hormuz.
Key points
- Brent crude fell $1.59, or 1.4%, to $111.84 a barrel in early Monday trade.
- Iran and Qatar held a third straight day of talks on ending the war.
- One analyst says Brent could head towards $120 after the midterms.
Oil prices fell more than 1% as trading opened in Asia on Monday, as talks between Iran and Qatar on ending the US-Israeli war on Iran ran into a third straight day.
Brent crude was down $1.59, or 1.4%, at $111.84 a barrel shortly after 5:40 am IST, and US West Texas Intermediate lost $1.56, or 1.5%, to $102.56. Brent had ended October at its highest level in six months.
“Oil is seeing a technical pullback this morning after last week’s strong gains,” said Tim Waterer, chief market analyst at KCM Trade. He warned that the dip may not last, saying that Iran-related rhetoric could push Brent towards $120 once the US midterm elections on Tuesday are out of the way.
In Tehran, Foreign Minister Abbas Araghchi said the talks were “ongoing and progressing”, adding that Iran was ready for “both defence and diplomacy”. Over the weekend he had said a plan worked out with Qatari mediators could reopen the Strait of Hormuz within two days if Washington accepted Iran’s terms. Attacks on tankers in the strait have kept shipping and insurance costs high.
Supply elsewhere has held up. Saudi Arabia raised its crude exports in October from September despite Houthi attacks on its energy sites, according to two of three ship-tracking firms. OPEC+ has kept its December production targets unchanged and is not expected to change course again until next year.
For India, which buys most of its oil abroad, every dollar matters. The country’s crude import bill rose 46% to $90.6 billion in April to September, with the Indian basket averaging $116 a barrel in September. The rupee has held on the stronger side of 95 to the dollar with help from the Reserve Bank, after touching a record low of 96.96 in May. Monday’s dip offers some relief before Dalal Street opens at 9:15 am, but traders will watch Tuesday’s US vote and any word from Doha and Tehran.