Oil prices fell sharply early Monday after reports that the U.S. and Iran are seeking diplomatic options to end the Middle East conflict, according to CNBC.
Brent crude futures for January delivery fell 4.61% to $108.20 a barrel as of 5:49 a.m. ET. U.S. West Texas Intermediate futures for December declined 4.44% to $99.50 a barrel.
U.S. Secretary of State Marco Rubio said President Donald Trump prefers not to use military force and would like to resolve the Iran war "diplomatically." Rubio said Trump "hasn't made a decision," adding, "we would prefer to do it peacefully." He spoke to reporters over the weekend.
Al Jazeera reported that Iranian authorities signaled a deal is still possible after two days of talks mediated by Qatar, as long as demands are implemented tangibly.
The Wall Street Journal and The New York Times reported that the U.S. is preparing for possible renewed military action after the Nov. 3 midterm elections. CNBC reported that both sides are preparing for more strikes. Iranian Supreme Leader Mojtaba Khamenei said Saturday that Tehran's armed forces should meet "any level or type of threat" with "an immediate, impactful, and geographically unrestricted response."
Tamas Varga, an analyst at PVM Oil Associates, said attacks on ships and refineries in the Middle East and on civilians in Ukraine continue to weaken confidence in lasting ceasefires. "Nonetheless, hope springs eternal," Varga said.