Oil prices fall after Iran's president says country is prepared to ease Middle East tensions

By William Watts

Oil futures ended lower Monday, giving up earlier gains, after Iran's president told reporters the country was prepared to take steps to ease tensions in the Middle East if Israel takes the same actions.

Price moves

West Texas Intermediate crude CL00 for November delivery CL.1 CLX24 declined 63 cents, or 0.9%, to finish at $70.37 a barrel on the New York Mercantile Exchange.November Brent crude BRN00 BRNX24, the global benchmark, fell 59 cents, or 0.8%, to settle at $73.90 a barrel on ICE Futures Europe.Back on Nymex, October gasoline RBV24 dropped 2.3% to $1.99 a gallon, while October heating oil HOV24 lost 0.8% to $2.145 a gallon.October natural gas NGV24 jumped 7.4% to $2.613 per million British thermal units.

Market drivers

"We're willing to put all our weapons aside so long as Israel is willing to do the same," Iranian President Masoud Pezeshkian told reporters in New York after arriving to attend the U.N. General Assembly, according to Bloomberg.

Pezeshkian and Israeli Prime Minister Benjamin Netanyahu are scheduled to address the General Assembly this week. "Both speeches could be market-moving events," said Robert Yawger, executive director for energy futures at Mizuho Securities. He noted that crude lost ground after Pezeshkian's earlier remarks.

WTI and Brent both booked solid weekly gains last week, boosted after the Federal Reserve's decision Wednesday to cut its key interest rate by 50 basis points, or half a percentage point. Crude jumped in Thursday's session, alongside global equities, as worries over an economic hard landing abated. Meanwhile, fears of a broader Middle East conflict that could threaten oil flows from the region also contributed to gains.

Iran-backed Hezbollah over the weekend launched rocket attacks from Lebanon into northern Israel, a response to Israeli attacks that killed a top commander, as well as an unprecedented attack that targeted the Iran-backed group's communications devices, causing them to explode. Hezbollah's deputy leader Naim Kassem said the rocket attack was just the beginning of what is now an "open-ended battle" with Israel.

"Despite the geopolitical risks supporting oil prices, the market remains cautious as the Middle East conflict has not yet significantly impacted supply," Mazen Salhab, chief market analyst for Middle East and North Africa at BDSwiss, said in emailed comments.

Associated Press contributed.

-William Watts

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09-23-24 1544ET

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