Brent crude futures for November fell 0.6% to $108.06 a barrel as of 9:27 a.m. local time today. The price had risen to as high as $109.45 the previous day before closing the session at $108.75.
At the same time, West Texas Intermediate crude futures for October traded at $104.71 a barrel.
Withdrawal decision amid Washington-Terhan tensions
One factor behind the downward movement in oil markets was the U.S. House of Representatives' approval of a war powers resolution calling for American forces to withdraw from hostilities with Iran. The resolution would direct U.S. President Donald Trump to withdraw American forces from the conflict with Iran.
With the decision, the House of Representatives approved a war powers resolution of the same nature for the third time. Gregory Meeks, a Democratic member of the House Foreign Affairs Committee, said the United States had been involved in the conflict for nearly 200 days.
Meeks argued that the Trump administration had failed to achieve the objectives it had announced. He cited rising gasoline prices and mortgage rates, inflation, billions of dollars in public spending and casualties suffered by the U.S. military among the costs of the conflict.
The decision put downward pressure on oil prices by strengthening expectations that tensions between Washington and Tehran could ease.
Fed decision and energy demand expectations
Expectations that the Federal Reserve will tighten monetary policy also increased pressure on the market. The Fed, which kept its policy rate unchanged at 3.50%-3.75% at its July meeting, is expected to raise rates by 25 basis points at its decision on September 16.
Although a potential rate hike would not directly eliminate supply shortages, it could limit economic activity and oil demand in the United States, the world's largest oil consumer.
Energy infrastructure remains a focus between Russia and Ukraine
Initiatives led by Donald Trump to halt mutual attacks on energy infrastructure between Russia and Ukraine helped ease concerns about global energy supplies.
Trump said Ukraine and Russia had agreed not to strike each other's energy facilities. He also said the main reason for the global rise in diesel prices was not Iran but, to a large extent, the Russia-Ukraine War.
Ukrainian President Volodymyr Zelenskyy said attacks had been carried out on oil refineries and drone production facilities in Russia, while Russia continued to target Ukraine's energy system and critical infrastructure.
Russian Foreign Ministry spokesperson Maria Zakharova said the proposal for an energy ceasefire needed to be supported by concrete steps. Efforts to halt attacks on energy infrastructure strengthened expectations that the risk of supply disruptions could decline, supporting the drop in oil prices.
Pipeline disruption in Saudi Arabia
Saudi Arabia's East-West Petroline, which bypasses the Strait of Hormuz, was shut down following the attacks on September 10. This kept alive concerns that supply disruptions could affect shipments.
Some September oil shipments planned for Europe were canceled on September 15. If the disruption on the pipeline continues, up to 4% of global oil supplies could remain at risk.
From a technical perspective, $114.79 is being watched as resistance and $101.74 as support for Brent crude.
