Brent crude oil pulled back from a six-month high on Monday as senior officials from multiple countries traveled to Tehran to push for the restart of security negotiations, easing market concerns about further escalation in the Middle East.
Iranian semi-official media reported that officials from Iran, Saudi Arabia, Turkey, and Pakistan held a meeting in Tehran on Monday, and all parties agreed to continue consultations.
Iranian President Pezeshkian stated that Iran supports reaching an understanding that helps strengthen regional unity, and reiterated that Iran has no intention of pursuing nuclear weapons.
Francisco Blanch, head of global commodities and derivatives research at Bank of America, said the market may view this as a positive signal that dialogue is resuming. However, he warned that if Iran resumes attacks on regional infrastructure, the average oil price could rise to around $120 per barrel in the coming months.
Technical factors also drove oil prices lower, as Brent crude's 14-day relative strength index rose above 74 last Friday, entering overbought territory that typically signals a possible price pullback.
The ongoing conflict between Saudi Arabia and the Houthi armed group limited the decline in oil prices.
Investors are watching Tuesday's Israeli election and next week's U.S. midterm elections; Trump has hinted that the U.S. might resume strikes on Iran after the elections.
December Brent crude futures fell 0.8%, settling at $115.81 per barrel. December WTI crude futures dropped 1.5%, settling at $101.76 per barrel.
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