Brent crude slipped slightly in choppy intraday trading as traders assessed the latest news on US-Iran negotiations amid ongoing turbulence in the Middle East.
The global benchmark settled near $109 a barrel after Bloomberg reported that claims of the US and Iran being close to a deal were inaccurate.
Earlier, an unverified report about Iran war talks pushed oil down from a five-month high, with prices falling as much as 3.3% during the session before paring losses; European natural gas futures also declined.
With conflicts intensifying across the Middle East, crude prices have climbed about 80% this year, and Iran has recently stepped up attacks on tankers in the Strait of Hormuz.
Although traders have increasingly shrugged off war-related rhetoric, especially statements from Washington aimed at talking down oil prices, any news suggesting a material change in oil flows could still trigger sharp market swings.
Traders are particularly wary that the White House may seek to ease tensions with Iran before the November 3 midterm elections, as soaring energy costs are set to become a major voter concern.
Nearly five months ago, when oil last sustained a longer stretch above $100 a barrel, the US and Iran reached a brief ceasefire that temporarily reopened the Strait of Hormuz, a key energy transit route.
"At a point this close to the election, market perception matters as much as fundamentals," said Dan Pickering, chief investment officer at Pickering Energy Partners. "People worry that market-moving news could emerge, so they also take profits more quickly."
Brent crude futures for December delivery fell 0.7% to settle at $108.79 a barrel.
WTI crude futures for December delivery fell 0.7% to settle at $97.82 a barrel.
The November contract, which expires Tuesday, fell 1.8% to settle at $101.79 a barrel.
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