Oil prices fall to two-month low as Trump says new Iran strikes ‘unlikely’

Oil prices have fallen to a fresh two-month low as optimism among investors over signs of diplomacy between the US and Iran helped the sell-off gain steam.The price of Brent crude oil sank by more than 4% to below 93 US dollars a barrel during Monday afternoon.This took the commodity to its lowest price since early September.It had edged back up to around 94 dollars a barrel shortly after.US President Donald Trump said new strikes on Iran were ‘highly unlikely’ if peace talks continue (Liam McBurney/PA)PA WireThe price of Brent crude has tumbled from highs of more than 115 dollars a barrel late last month, as investors welcomed signs of diplomatic efforts between the US and Iran.US President Donald Trump recognised last week that the Iran war played a part in his Republican Party’s defeat in the midterm elections but said it was something he had to do.Over the weekend, the president dialled down his previous tone towards the conflict and said he was “highly unlikely” to order new strikes in Iran should talks progress, including around the reopening of the Strait of Hormuz.Oil prices have spiked since the start of the war in late February because of concerns about supply constraints in the Middle East, and have remained significantly above their pre-conflict levels.(PA Graphics)PA GraphicsSusannah Streeter, chief investment strategist for Wealth Club, said: “Investors are assessing signs of progress in Middle East peace negotiations after Trump’s latest comments suggesting fresh attacks on Iran are highly unlikely, while talks continue.”Read MoreShe said “hopes of a more conciliatory approach help take some of the heat out of oil markets”.Chris Beauchamp, chief market analyst for IG, said: “Two-month lows in oil have done much to bolster bruised sentiment in global markets, and the admittedly small signs of progress in peace talks adds to downward move.“Each passing day adds to the view that no resumption of the war is likely, but one more US carrier is yet to arrive in-region, adding a hefty dose of uncertainty.”