Oil prices extend losses on hopes of US-Iran breakthrough

Oil prices fell on Monday as hopes grew that the United States and Iran may reach a breakthrough, lessening concerns over potential further supply disruptions through the Strait of Hormuz. Brent crude edged closer to US$97 per barrel, while US West Texas Intermediate (WTI) neared US$90, further declining after both benchmarks plummeted more than 13 percent the previous week.

The latest price movement followed remarks by US President Donald Trump, who said it was "highly unlikely" he would authorize additional strikes on Iran if negotiations over the country's nuclear program and the opening of the Strait of Hormuz made significant progress. Trump also noted that the unpopular conflict, which has boosted oil and gasoline prices, played a role in the Republican's defeat in the midterm elections.

Speculation of a swift resolution to the Middle East conflict due to Democrats pushing for one added to the selling pressure on crude last week. However, optimism over a diplomatic breakthrough was dampened by US Secretary of State Marco Rubio's caution, stating Iran's demands thus far were unacceptable. Geopolitical risks persisted following Houthi attacks that damaged a prominent building in Riyadh's financial area and caused minor harm to Saudi Aramco's offices.

In currency markets, the US Dollar Index (DXY) stood at 102.21 on November 8, a slight decrease from the previous session. The index has gained around 2.6 percent over the past year. The US dollar was valued at approximately RM4.0587 against the Malaysian ringgit on November 6, marking a 0.28 percent increase from the previous day, though Malaysia's currency remained stronger by 0.69 percent over the past month and 2.81 percent over the past year.

The dip in oil prices may provide some respite for oil-importing nations like Malaysia, who can benefit from reduced energy costs. Nonetheless, the ongoing US-Iran negotiations and security concerns surrounding the Strait of Hormuz continue to be crucial factors influencing oil-market sentiment.