Oil drops 1% as US, Iran pledge to continue talks

Oil prices fell 1% on Monday as immediate fears of a conflict in the Middle East eased after the US and Iran pledged to continue talks about Tehran's nuclear programme over the weekend, calming investors anxious about supply disruptions, Report informs via Reuters.

Brent crude futures fell 67 cents, or 1%, to $67.38 a barrel on Monday by 0444 GMT, while US West Texas Intermediate crude was at $62.94 a barrel, down 61 cents, or 1%.

"With more talks on the horizon the immediate fear of supply disruptions in the Middle East has eased quite a bit," IG market analyst Tony Sycamore said.

Iran and the US pledged to continue the indirect nuclear talks following what both sides described as positive discussions on Friday in Oman despite differences. That allayed fears that failure to reach a deal might nudge the Middle East closer to war, as the US has positioned more military forces in the area.

Investors are also worried about possible disruptions to supply from Iran and other regional producers as exports equal to about a fifth of the world's total oil consumption pass through the Strait of Hormuz between Oman and Iran.