Oil prices fell on Monday, reaching a two-week low after declining for a fifth straight trading session. Prices had already lost more than 9% over the previous four days before steadying as immediate supply concerns in the Middle East eased.
The decline is driven by optimism that Saudi Arabia plans to restart a pipeline damaged by Houthi attacks earlier this month. Investors anticipate that the reopening of this critical pipeline will allow more oil from the region to reach world markets. Traders are also monitoring a recovery in shipments from Saudi Arabia and improving flows through the Strait of Hormuz.
Market sentiment is further influenced by prospects for renewed diplomacy and an apparent uptick in efforts to end the US-Iran war. Confirmation of direct U.S.-Iran talks at this week’s U.N. General Assembly could further weigh on prices by raising expectations for increased supply, even as some Middle East tensions continue to escalate.