Oil price dips briefly below $100 on Saudi exports, hopes of US-Iran diplomacy

NEW YORK (REUTERS) -- Oil prices eased on Monday to their lowest level in 12 days, as investors eyed a partial recovery in shipments from Saudi Arabia and hoped for diplomatic progress on the Iran war due to this week’s UN meeting.

During the session, Brent crude futures and US West Texas Intermediate crude dipped below $100 a barrel to their lowest since September 9. The Brent contract for November was at $100.39 a barrel at 11:02 a.m. ET (1502 GMT), down $3.48, or 3.35%.

The WTI October contract that is expiring on Tuesday fell $4.64, or 4.63%, to $95.66 a barrel. The November contract stood at $92.34.

On Sunday, Iran and the US exchanged new threats, although President Donald Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the United Nations General Assembly.

Iran has conveyed its conditions to mediators for re-engaging in negotiations, Al Jazeera reported, citing Iran’s security chief, Mohsen Rezaei.

Fighting in the Middle East continued as Yemen’s Houthis said they had attacked Riyadh as well as a Saudi Aramco facility in the Red Sea city of Yanbu, while pushing to cut off the Red Sea coast from remaining areas held by Saudi-backed forces.

China has asked Iran to help rein in the Houthis after an appeal to Beijing by Saudi Arabia following the attacks, according to three Iranian sources familiar with the matter.

The attacks by the Houthis on Aramco’s East-West pipeline have prompted the firm to increase exports through the Strait of Hormuz this month and next after halting some shipments via Yanbu.

“Middle East oil flows remain surprisingly strong despite the disruption to Saudi Arabia’s East-West pipeline,” JPMorgan analysts said in a September 18 note.

“The most notable pivot has come from Saudi Arabia,” the analysts said, as satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million bpd over the past six days, up from just 700,000 bpd in August.

Hopes for a breakthrough in peace talks during this week’s UN General Assembly further weighed on prices, said Tamas Varga, analyst at PVM Oil Associates.

Meanwhile, Libya’s National Oil Corp Chairman Massoud Suleman told Reuters on Monday that the country’s Sharara oilfield has seen a partial reduction in production, without giving a reason.