Oil Prices Plummet on Diplomatic Hopes Amid Ongoing Middle East Tensions
Oil prices dropped to an 11-day low on September 21 due to investors' hopes for diplomatic progress in the war between the US and Iran, following a UN meeting. The November Brent contract was priced at $101.75 per barrel, down $2.12 or 2% from its previous price. The October WTI contract fell by $1.96 or 2%, to $98.34 per barrel.
Tim Waterer, chief market analyst at KCM Trade, said that the risk premium being removed from oil prices was due to hopes for a diplomatic path to de-escalating the war between the US and Iran. However, tensions in the Middle East remained high, as Iran-backed Yemeni Houthis attacked 'sensitive' sites in Saudi Arabia's capital, Riyadh.
The price of Russian oil exceeded $120 per barrel for the first time since April due to rising demand in China. The average volume of Saudi oil transported through the Strait of Hormuz over the past six days was 2.9 million barrels per day, compared with just 700,000 barrels per day in August.