Oil Falls 3.2% to $109.75 as Iran-Qatar Talks in Focus
Key Facts
Oil prices fell more than 3% on Monday, November 2, as Iranian and Qatari officials held talks for a third consecutive day seeking a deal to end the U.S.-Israeli war on Iran. By 0407 GMT, Brent futures had fallen 3.2% to $109.75 a barrel, while U.S. West Texas Intermediate crude fell 3.3% to $100.69. Reuters said hopes that the diplomatic track would continue, alongside the absence of a tangible military escalation over the weekend, eased some immediate pressure on prices. The report quoted the chief market analyst at “KCM Trade” as saying these factors “have taken some immediate heat out of prices for now.” In India, crude prices remain a pivotal factor for bonds and the rupee, with a Reuters report saying the bond market’s trajectory this month depends on oil prices and the central bank tightening liquidity to support the currency.
Traders expect India’s benchmark 10-year bond yield to move within a broad range of 7.35% to 7.50% in November. That follows a decline of about 6 basis points in the week ended October 30. But the weekly fall came after a rise of more than 70 basis points over the preceding 10 weeks through late October. Reuters said such a run had not been seen since the start of available LSEG data in 1998. The latest weekly decline puts the move in the context of a longer rally, as investors monitor the effect of energy prices on the Indian market.
Consultancy IFA Global said Brent staying above $100 a barrel could limit rupee gains. “We do not expect the rupee to strengthen much from its current levels as long as Brent crude is above $100 a barrel,” the company said. The view comes as a Reuters report links bond movements to the Indian central bank’s liquidity tightening to support the currency. Traders are also watching the U.S. midterm elections, which could reshape the course of the war and oil prices. ING analysts said the question after the election is whether the geopolitical risk premium will remain elevated or begin to recede.
On the diplomatic track, Iranian Foreign Minister Abbas Araghchi said on Sunday that the “ongoing and advanced” talks aim to continue consultations with Qatari mediators, adding that Tehran is prepared for “defense and diplomacy.” A UAE presidential adviser said the country hopes to secure a breakthrough through Qatari mediation to avoid another round of confrontation between the United States and Iran. Bahrain’s foreign minister also said his country welcomes all efforts to reduce tensions, prevent escalation and open opportunities for dialogue. These positions come as Iranian-Qatari talks continue for a third day and the oil market watches whether they will lead to an agreement. ING analysts link their assessment of the geopolitical risk premium to what happens after the U.S. midterm elections.
On U.S. inflation, the core personal consumption expenditures price index, excluding food and energy, rose 3.1% year over year in September 2026. The U.S. Bureau of Economic Analysis published the reading on October 29, and it covers September rather than the release date. The reading provides context for the U.S. inflation trajectory, while Indian markets in November are focused on crude, liquidity and the rupee. The bureau set November 25 as the release date for October personal income and spending data. That will be the next data release, as Indian bond traders monitor the effects of oil and the outcome of the U.S. midterm elections on markets.