Oil Prices Plummet on Diplomatic Hopes Amid Ongoing Mideast Tensions

Oil prices dropped to an 11-day low on September 21 as investors became optimistic about diplomatic progress in the US-Iran conflict after this week's UN meeting. The Brent crude oil futures and U.S. West Texas Intermediate crude reached their lowest level since September 10, with the November Brent contract priced at $101.75 a barrel, down 2% or $2.12.

The October WTI contract fell by $1.96, or 2%, to $98.34 a barrel. Tim Waterer, chief market analyst at KCM Trade, noted that some of the risk premium was being removed from oil prices in hopes that a diplomatic path to de-escalating the war between the US and Iran may emerge this week.

Tensions in the Middle East remained high as Iran-backed Yemeni Houthis attacked Saudi Arabia's capital, Riyadh, with missiles and drones on Saturday. However, JPMorgan analysts observed that oil flows in the Middle East remained surprisingly strong despite disruptions to Saudi Arabia's 'East-West' pipeline.