Oil prices fell Tuesday, with U.S. benchmark crude slipping back under $100 a barrel as traders held out hopes for regional diplomatic efforts to ease Middle East tensions.
December Brent crude futures settled down 1.7% at $113.88 a barrel, and December West Texas Intermediate fell 1.8% to $99.90 a barrel.
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"The possibility of a peace deal in Iran is putting pressure on prices," said Robert Yawger, commodity specialist at Mizuho Securities USA. The pullback was likely influenced by profit-taking after speculative investors had been loading up long positions, he added.
Iran, Saudi Arabia, Pakistan and Turkey agreed to continue talks on regional peace and security after senior officials met in Tehran on Monday, according to a joint statement issued after the meeting.
Saudi Arabia's Foreign Ministry said the visit was part of efforts to reduce tensions and support mediation by Qatar and Pakistan. The ministry called for opening channels of negotiation to prevent a return to military escalation in the region.
Meanwhile, Oman said discussions with Iran had produced an outline for a temporary arrangement to restore free navigation through the Strait of Hormuz, although political obstacles remain.
Implementing such an arrangement would require compromises by both Washington and Tehran, Omani Foreign Minister Badr Albusaidi said Monday in a speech at the University of Cambridge.
Prospects for Russia-Ukraine talks next month also contributed to the easing of oil prices, BOK Financial's senior vice president of trading Dennis Kissler said in a note. "While the prospect of peace in both areas is keeping some downside pressure on prices near term, the facts remain of tight global supplies, and the increasing U.S. military presence in the Persian Gulf," he said.
Write to Farhan Rafid at farhan.rafid@wsj.com and Anthony Harrup at anthony.harrup@wsj.com
