Crude oil prices drop 3% as Trump favours peacful resolution with Iran; Brent crude drops to $108 per barrel

Crude oil prices staged a sharp pullback from the six-month high levels touched last week. Oil traders and investors weighed in on the outcome of diplomatic negotiations between the US and Iran. Brent crude oil futures are trading near intraday low levels of $108 per barrel on Monday, plunging over 3.2%.

Similarly, the WTI crude oil futures fell below the $100 per barrel mark on Monday evening. Brent crude oil futures jumped nearly 14% in October after supply disruptions and threats of fresh escalations in the Middle East fired up crude oil prices.

Why are crude oil prices falling on Monday?

Crude oil prices fell after fears of supply disruption abated on positive news flow coming out of the war zone. Hopes of diplomatic resolution between the US and Iran jumped after reports indicated that the President wants to give more time for negotiations. This comes after reports indicated that the US military has prepared and submitted a military offensive plan against Iran, to be carried out after the US mid-term elections.

The US Secretary of State Marco Rubio also said that President Trump favoured resolving the conflict peacefully. On the other hand, Iranian officials also sounded positive on resolving the issue peacefully after two-day talks held between the counterparts in Doha, Qatar.

However, investors and oil traders continued to remain watchful and monitor the situation in the Strait of Hormuz as the supply of oil continues to remain under threat.

MCX crude oil price

Meanwhile, the crude oil prices traded on the MCX futures contract fell over 4.7% to trade near ₹9,466 per barrel on Monday evening, after hitting one-month high levels on Friday.

Equity market rejoice

The global equity markets breathed a sigh of relief after geopolitical tensions ease in the Middle East. The US stock markets opened in green with gains of up to 0.8%. Similarly, Indian benchmark indices also closed in green with gains of up to 1.6%.