Oil prices mixed as supply concerns fade

Global oil prices finished mixed Tuesday amid easing supply concerns fueled by speculation about a diplomatic solution to the West's conflict with Iran over its nuclear program.

The price of US benchmark West Texas Intermediate for November delivery dropped 46 cents to close at $103.13 a barrel, the fourth day in a row of decline.

European benchmark Brent North Sea oil futures for November delivery tacked on 48 cents to $108.64 a barrel.

Oil prices have been in retreat recently in part due to the diminished chance of a US military strike on Syria and, more recently, hints of a diplomatic opening between the West and Iran.

During an address to the United Nations Tuesday, President Barack Obama pushed for pursuing diplomacy with Iran's new government, but called on Tehran to be transparent about its nuclear program.

Iran's economy has been crippled by a series of UN and US sanctions aimed at crippling its nuclear program. The West suspects the program includes nuclear weapons, an allegation Iran denies.

"If they do indeed follow through with things and get sanctions lifted, they (Iran) have a lot of oil they can put on the market," said Kyle Cooper, managing partner at IAF Advisors in Houston, Texas.

US oil prices rallied from a low of $102.30 earlier in the day in part out of recognition that any change in Iran's status in the international community would take significant time, Cooper said.

Saudi Arabian Oil Minister Ali al-Naimi lent further downward pressure to prices, telling reporters on the sidelines of a Riyadh meeting that his country is "ready to compensate for any shortfall in the oil market."

James Williams of WTRG Economics said there was no obvious reason for the divided performance of WTI and Brent on Tuesday.

However, Williams said some traders think the gap between the two prices is "too small" given the lofty supplies in the US and the difficulties with transporting oil there compared with Europe.