KUALA LUMPUR: Oil prices slipped about 1% on Tuesday, reaching their lowest closing levels in nearly four weeks as investors assessed diplomatic efforts to resolve the conflicts involving Iran and Ukraine against the risk of further supply disruptions from continued military activity.
Brent crude futures fell US$1.17, or 1%, to settle at US$103.60 a barrel, their lowest close since Oct 7. US West Texas Intermediate crude declined 37 US cents to US$96.09, its weakest settlement since Oct 14, according to Reuters.
Market sentiment was influenced by mixed signals surrounding efforts to end the US-Iran conflict. Qatar said Washington and Tehran remained committed to mediation and were reviewing proposals to bridge their differences, although a senior Iranian official indicated that the two sides remained some distance from an agreement.
ING said progress in peace negotiations could put further downward pressure on oil prices, although the risk of escalation remained.
Meanwhile, Russia confirmed that trilateral peace talks involving Ukraine and the US would take place in Abu Dhabi from Nov 10 to 11. A potential settlement could allow more Russian oil to reach international markets, easing supply constraints.
However, continued attacks on energy infrastructure in both Russia and Ukraine, alongside US strikes on Iran's Qeshm Island, underscored the uncertainty surrounding supply prospects.
Saudi Aramco is also expanding a crude oil pipeline that bypasses the Strait of Hormuz, according to its chief executive Amin Nasser, as regional producers seek alternative export routes.
Investors were also awaiting US weekly inventory data. Analysts estimated crude stocks rose by 900,000 barrels in the week ended Oct 30, which would mark the first increase in five weeks.