Oil prices fell on Wednesday after United States President Donald Trump said American and Iranian representatives held “very good” talks at the United Nations.
Brent crude, the international benchmark, dropped 0.9 per cent to $98.41 per barrel, while West Texas Intermediate fell 1.4 per cent to $89.23 per barrel in Asian trading.
Both contracts traded below the $100 mark after repeatedly crossing the threshold since the Middle East conflict began.
Trump described the three-hour meeting with Iranian representatives as “very good” and “very productive”, adding that another meeting had been scheduled.
The comments came hours after Trump warned in his address to the 81st United Nations General Assembly that he faced a major decision on whether to reach a deal with Iran or “annihilate” the Islamic Republic.
The latest talks raised hopes of a diplomatic solution and eased some concerns over further escalation in the Middle East.
Stephen Innes of Quintex Intel said the meeting was significant because it shifted the market away from pricing based solely on escalation towards the possibility of diplomacy, although a final agreement remained uncertain.
The conflict has disrupted regional energy supplies, with Iran keeping the Strait of Hormuz closed while the United States maintains pressure on Iranian ports.
READ ALSO:Tinubu: $800m Ima Gas Field Investment Shows Nigeria’s Oil Reforms Are Bearing Fruit
The fall in prices also coincided with reports that Saudi Arabia had resumed operations along its East-West Pipeline, a key route for transporting crude to export terminals.
Bloomberg reported that Saudi Arabia was targeting a resumption of exports later this week.
Saudi oil giant Aramco had also reportedly told some Asian refiners they could soon obtain crude from the Red Sea port of Yanbu, while European customers were not expected to receive October allocations.
