Trump's Iran Deal Hopes Spark Oil Price Plunge
Oil prices plummeted by around 7 percent to a three-week low on Monday after US President Donald Trump put off a fresh attack on Iran in an attempt to secure a quick deal that could boost oil supplies from the Gulf.
The front-month Brent futures fell $6.35, or 7.0 percent, to settle at $83.77 a barrel, while US West Texas Intermediate (WTI) crude dropped $4.33, or 5.1 percent, to close at $80.34.
According to analysts at Ritterbusch and Associates, the sharp selloff in crude futures appears to be another overreaction to Trump's comments on a potential deal with Iran, following his weekend threats of massive attacks that were also touted as imminent.
The Saudi-backed Houthi movement in Yemen has threatened to target Saudi shipping, causing six Saudi-flagged supertankers to change course and head towards southern Africa. However, two tankers laden with Saudi oil did cross the Bab el-Mandeb Strait between the Red Sea and the Gulf of Aden over the weekend.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies have approved an increase in oil production quotas by around 188,000 barrels per day from September.