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."
Iranian authorities signaled a deal is still possible following two days of talks mediated by Qatar, as long as demands are implemented tangibly, according to Al Jazeera, as cited by CNBC.
The report also says The Wall Street Journal and The New York Times indicate the U.S. is preparing for possible renewed military action after the Nov. 3 midterm elections. Iranian Supreme Leader Mojtaba Khamenei called on Tehran's armed forces on Saturday to 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 "doing little to inspire confidence in the prospects for lasting ceasefires in the foreseeable future." Varga added, "Nonetheless, hope springs eternal."