Business News : International crude oil prices continued to decline on Monday. After posting its biggest weekly drop since April 2020, crude oil once again fell below $100 a barrel. The market softening comes as traders hope for a diplomatic solution to the US-Iran standoff amid ongoing attacks in West Asia.
Brent crude futures fell to 97.30 a barrel
On Monday, Nov. 9, Brent crude futures fell 1.04 percent to $97.30 a barrel. At one point during trading, it saw a drop of more than $1. Meanwhile, US West Texas Intermediate (WTI) crude was also down 58 cents, or 0.60 percent, at 90.29 a barrel.
Markets saw relief after Trump's statement
This latest drop in oil prices is due to a big statement from Donald Trump. In a phone interview with CNN, Trump indicated that he would not authorize new strikes on Iran if ongoing talks to end the conflict move forward. Trump has made it clear that, if the two sides reach a firm agreement, it is highly unlikely that further military action will be needed.
Major American attacks on Iran may begin after the US midterm elections
Earlier, Trump hinted that major US strikes on Iran could resume after the US midterm elections last week. However, there has been no sign of any major military action so far. Meanwhile, the landslide victory of the Democratic Party in the US midterm elections has also strengthened hopes among traders that the conflict will not escalate. This confidence has played an important role in reducing oil prices.
Attack on Aramco office in Riyadh
Despite diplomatic efforts, tensions remain high in West Asia. Iran has already warned that it will retaliate by targeting US and Israeli interests. Meanwhile, on Sunday, Iran-backed Houthi rebels in Yemen attacked the Saudi capital, Riyadh. The attack damaged the offices of the state-owned oil company Saudi Aramco. According to the Saudi Press Agency, the city of Riyadh intercepted a new attack of ballistic and cruise missiles in the air. Aramco's offices suffered minor damage in the attack. Fortunately, there were no casualties.
Oil may reach 140 dollars in 2027
While prices are currently falling, investment bank Goldman Sachs has raised its forecast for crude oil prices, citing rising risks to global supply. The bank has raised its Brent crude oil price forecast for December to $105 per barrel from $90. The forecast for US WTI crude oil was also raised from $81 to $94 per barrel.
According to a Reuters report, Goldman Sachs has warned that Brent crude could reach $140 a barrel in 2027 if Gulf oil production remains 3.5 million barrels per day below the 2025 average. It may average around $130 for the entire year. The bank believes the geopolitical risk premium on oil prices will remain high due to fears of supply disruptions from the Middle East and difficulties in reaching a permanent deal.
Even after seven months, the strategy to end the war remains unclear
On the other hand, analysts at JPMorgan have also expressed concern about the uncertainty surrounding the conflict. They say it is still difficult to predict the future course of the war. At the beginning of the conflict, the bank hoped that the US administration would refrain from crossing certain economic boundaries. However, seven months into the war, many of these economic boundaries have been broken, while no clear strategy to end the war has yet emerged.