Oil Slides More Than 7% on Revived US-Iran Diplomacy as WTI Breaks Below $100

Crude oil fell sharply on Monday, November 2, as renewed diplomacy over the eight-month US-Iran conflict eased fears of further supply disruption. Both Brent and WTI were down more than 4% in early trade, according to CNBC, and the slide deepened through the session: by 12:24 p.m. ET Brent had fallen $8.47, or 7.47%, to $104.96 a barrel and WTI was down 7.2% at $96.62, Reuters reported. The Wall Street Journal put the decline at more than 6%, and WTI broke below $98 during the morning.

The trigger was diplomatic rather than physical. A draft proposal was circulated after another round of talks in Doha on Sunday, CNBC reported, citing Reuters, and Iranian and Qatari officials held a third consecutive day of talks. Rubio said over the weekend that President Trump would prefer to resolve the war "diplomatically," while adding that the US has the ability to act militarily if needed. Bloomberg tied the slide to a report that Trump favors diplomacy, and Iranian President Masoud Pezeshkian said the supreme leader had granted "certain authorities" for peace talks, according to Reuters. No agreement has been announced.

The move unwinds part of a sharp October run, in which Brent and WTI rose about 15% and 12% respectively to their highest levels since April, according to The National. In London, BP fell 2.6% to 611p, Ithaca Energy dropped 2.4% to 295p and SHEL slipped about 1.3% in early trading. Risk assets moved the other way: Nasdaq 100 futures were up more than 1%, a relief bid after the Nasdaq 100's worst month in a year. GasBuddy's Patrick De Haan said wholesale gasoline and diesel pointed to a roughly 16-cent-a-gallon decline and that the US average could fall under $4 a gallon within a week, Transport Topics reported.

What to watch: whether the Doha track produces a formal agreement, and whether the market's optimism survives contact with it. Raymond James analyst Pavel Molchanov cautioned that the conflict has produced many "false dawns," per Reuters. Goldman Sachs, which has raised its December forecast to $105 a barrel for Brent and $94 for WTI citing high disruption risk, still prices in a supply-disruption allowance through 2027. With the midterm elections on Tuesday and payrolls data on Friday, oil is likely to stay headline-driven this week.