(Oct 9) : Oil fell after President Donald Trump said the US would not attack Iran ahead of November’s midterm elections.

West Texas Intermediate dropped toward US$91 barrel after climbing 3.6% on Thursday, while Brent closed above US$104. The US leader cited what he said were “productive discussions” with the Islamic Republic, while also saying that crude oil was flowing through the Strait of Hormuz in record volumes.

After Trump’s remarks, the New York Times reported that the US had drawn up plans for three days of strikes. The Pentagon had developed plans to hit drone and missile arsenals, energy facilities and other sites, the newspaper said.

Crude has had a volatile start to October as the US-Iran war drags on, with futures buffeted by rising flows from the Middle East, a pick-up in vessel attacks, and tightness in product markets. The fall-out from soaring freight rates, and renewed fighting between Saudi Arabia and the Tehran-backed Houthis in Yemen, have added further cross-currents to the market.

Beyond the Middle East, traders were also tracking Hurricane Isaias, which is gathering strength and expected to make landfall along the northern US Gulf Coast late Friday or early Saturday, with Alabama, Mississippi and the Florida Panhandle at risk. Producers in the US Gulf of Mexico have shut in about 1.3 million barrels a day of crude production, more than 60% of output in the region.

uploaded by Isabelle Francis