WTI Settles at $101.76 and Brent at $115.81 as Iran Diplomacy Offsets Saudi Attack Fears

Crude oil prices pulled back from near six-month highs on Monday as diplomatic efforts to contain the Iran conflict tempered buying, though persistent Houthi attacks on Saudi Arabia and ongoing supply risks kept both benchmarks well above $100. NYMEX WTI December futures settled at $101.76 per barrel, down $1.51 or 1.46%, while Brent closed at $115.81, off 91 cents or 0.78%. Brent briefly reversed its losses to trade near $117 intraday before fading into the close.

A key driver of the retreat was a report that President Trump declined Israeli Prime Minister Netanyahu's push for a joint strike on Iran ahead of Israel's October 27 election, reducing the immediate risk of a direct confrontation. Qatar-mediated talks between the US and Iran also gave traders reason to reduce some of the war premium, though analysts cautioned that the premium will persist as long as Gulf shipping lanes, Saudi energy infrastructure and tanker routes remain exposed to attack. WTI options skew toward calls climbed to plus 7.2%, its highest level since September 10, signaling that traders are still pricing in meaningful upside risk even as near-term physical tightness eased, with the 1-2 month WTI spread narrowing to $2.30 per barrel from $5.40.

European natural gas surged in parallel, topping 97 euros per megawatt-hour, or roughly $108.70, for the first time since the 2022 energy crisis, driven by winter supply fears and the loss of Russian volumes. TurkStream Line 2, the last remaining pipeline route for Russian gas into the EU, was running at roughly 117% of its nameplate capacity ahead of its scheduled closure no later than November 2027, and Russian LNG faces an EU ban from January 2027, together representing about 12-13% of Europe's total gas imports. US natural gas futures fell as much as 5.4% to their lowest level since April as warmer weather forecasts pointed to weaker early-winter heating demand, with the November contract settling at $2.6020 per MMBtu.

Brent has risen from $60 per barrel on January 1 to $116 as of Monday's close, a near doubling driven by the Iran war, and US-traded oil company shares are up 55% on the year. The US Strategic Petroleum Reserve fell to 282.6 million barrels last week, its lowest level since 1982, leaving limited buffer if supply disruptions intensify. Refined product settlements added to the demand picture: NYMEX diesel closed at $4.9120 per gallon and gasoline at $3.2185 per gallon.