Oil prices fell about 1% on Monday as concerns about conflict in the Middle East eased slightly. The market calmed after the US and Iran agreed to resume talks on Tehran's nuclear program, reducing fears of imminent supply disruptions.

Brent fell about 67 cents to $67.38 per barrel, while WTI weakened 61 cents to $62.94 per barrel. Market participants believe that as long as the dialogue remains active, the likelihood of sudden supply disruptions is smaller at least temporarily.

The talks in Oman were described as "positive" by both sides, although significant differences remain. Most importantly, however, for the market, negotiations did not break down midway. This alleviated concerns that a failed deal could drag the region closer to war, especially as the US has increased its military presence in the region.

Investors are also focusing on the Strait of Hormuz a vital waterway through which about one-fifth of global oil consumption passes between Oman and Iran. If the situation escalates, the risk of disruptions to shipments from Iran and other regional producers could immediately trigger another market panic.

Although tensions appear to have eased, the threat hasn't gone away. Iran's foreign minister warned Tehran would attack US bases in the Middle East if they were attacked. So, oil may fall due to the market's relief... but the embers of the conflict haven't completely died down. (mrv)[sma]

Source : Newsmaker.id