NEW YORK (AP) — The price of oil fell for the seventh time in eight days, as the U.S. signaled a willingness to pursue a diplomatic path with Iran.
Meanwhile, the average price for retail gasoline fell a penny to $3.46 a gallon.
Benchmark oil for November delivery fell 46 cents to finish at $103.13 a barrel, the lowest close since July 30. Oil has dropped 6.7 percent since closing at a two-year high of $110.53 on Sept. 6.
Some analysts said that a seeming thaw in relations between Iran and Western powers and apparent diplomatic progress over the elimination of Syria's chemical weapons were easing fears of a potential disruption in oil supplies.
President Barack Obama on Tuesday welcomed the new Iranian government's pursuit of a "more moderate course," saying it should offer the basis for a breakthrough on Iran's nuclear impasse with the United Nations and the U.S.
Sanctions against Iran's oil sector have cut the Islamist Republic's exports from 2.5 million barrels in 2011 to 1.2 million.
Obama also called on the U.N. Security Council to pass a resolution that would enforce consequences on Syrian President Bashar Assad if he fails to follow a U.S.-Russian deal to turn his chemical weapon stockpiles over to the international community. That deal, brokered by Secretary of State John Kerry, averted a threatened U.S. military strike.
Jim Ritterbusch, president of Ritterbusch and Associates, wrote in a note to clients that much of the recent selling "would appear to represent a process of 'throwing in the towel' as a result of a need to downsize geopolitical risk premium by at least $5 to $6 a barrel."
At the pump, the average price for gasoline has fallen 13 cents so far in September. At $3.46 a gallon, gas is a nickel cheaper than a week ago and 35 cents less than it cost at this time last year.
AAA sees more relief ahead.
"Barring a hurricane or other unexpected disruption to gasoline production and distribution, AAA expects that retail prices will continue lower in the coming months, as sufficient supplies, flat demand and cheaper winter-blend gasoline mean motorists are likely to pay less to fill their tanks," wrote Avery Ash, AAA's manager of federal relations, in a weekly commentary.
In other markets, Brent crude, the benchmark for international crudes used by many U.S. refineries, rose 48 cents to $108.64 a barrel on the ICE Futures exchange in London.
On the Nymex:
— Wholesale gasoline rose 4 cents to $2.66 per gallon.
— Natural gas lost 11 cents to $3.49 per 1,000 cubic feet.
— Heating oil was flat at $2.96 per gallon.
Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.