By Ahmad Ghaddar
LONDON, Nov 3 (Reuters) - Oil prices slumped on Tuesday after President Donald Trump said the US would end billions of dollars of annual military support to Israel.
Prices had earlier risen after an Iranian official said Tehran and Washington remained far from a deal to end their war and the US struck Iran's Qeshm Island.
Brent crude futures were down $3.45, or 3.3%, to $101.32 a barrel at 1350 GMT. They hit their lowest since October 8 during the session, having earlier traded above
$107 a barrel.
US West Texas Intermediate crude was down $2.16, or 2.2%, to 94.30 a barrel, having earlier his its lowest since October 15.
"Now, as far as paying Israel, Bibi Netanyahu and I have made a deal that we give Israel $4 billion a year, and we made a deal months ago that we're stopping," Trump told Fox News' Fox and Friends. "We've already agreed that by the end of this year we won't be paying Israel."
Both benchmarks dropped more than 7% on Monday as talks between Iranian and Qatari officials lifted hopes for an end to the US-Israeli war with Iran.
Qatar's foreign ministry spokesperson said on Tuesday that the US and Iran remain committed to mediation efforts and are reviewing proposals aimed at bridging their differences. Talks with both sides had shown progress and efforts to narrow remaining gaps were continuing, the spokesperson added.
"Despite these positive signals, it's probably too early to think escalation risks have passed," ING said in a note on Tuesday. "What is clear, though, is that strong signals of progress in peace talks would mean more downside for prices."
Polls open across the US on Tuesday in midterm elections that will serve as a referendum on Trump's first two years back in office, with voter frustration over the Iran war and the resulting rise in fuel prices emerging as a key issue.
Brent ended October at its highest in six months on concerns the conflict could escalate again after the elections.
A Ukrainian drone attack, meanwhile, damaged an oil refinery in the Russian city of Yaroslavl, Governor Mikhail Evrayev said on Tuesday.
Russia launched a massive overnight strike on Ukrainian energy facilities in the Vinnytsia, Dnipropetrovsk and Kharkiv regions, Interfax news agency said, citing the defence ministry.
The US will bring together delegations from Ukraine and Russia in Abu Dhabi on November 10 and 11 to discuss ending the war, post-war security pacts and de-escalation efforts.
(Additional reporting by Shadia Nasralla in London, Noel John in Bengaluru and Sam Li in Beijing; Editing by Clarence Fernandez, Joe Bavier and Mark Potter)
