Oil Prices Plummet on Trump's Predictions of Middle East De-escalation
Oil prices plummeted on Tuesday after hitting a three-year high the day before, following US President Donald Trump's prediction that the war in the Middle East could end soon.
Trump's comments sparked a sharp decline in oil futures, with Brent falling $4.17 or 4.2% to $94.79 per barrel and WTI crude dropping $3.81 or 4% to $90.96 per barrel.
The prices surge past $100 a barrel on Monday was driven by supply cuts from Saudi Arabia and other producers amid the US-Israeli war with Iran, sparking fears of major disruptions to global supplies.
However, Russian President Vladimir Putin's call with Trump and proposals for a quick settlement to the conflict helped ease concerns about prolonged supply disruption.
Suvro Sarkar from DBS Bank noted that while there was an overreaction to the upside yesterday, the market is underappreciating risks at these levels for Brent. He added that Murban and Dubai grades are still above $100 per barrel, indicating no significant change in ground realities.