Brent crude pushed lower in morning London trading, after a meeting between Iraqi Deputy Prime Minister Mr Tareq Aziz and UN Secretary General Mr Kofi Annan eased fears over a potential military conflict.
At midday, October-dated reference Brent crude contracts traded down 21 cents on the day at $27.33 per barrel.
Mr Aziz started a meeting in Johannesburg at 9.00 a.m. today with Mr Annan to discuss his country's stance regarding the US' military threat.
"The United States is threatening to launch another large-scale aggression against Iraq," Aziz had said in a speech at the summit yesterday. He added: "We will fight against them. This is our obligation".
However, face-to-face talks between relevant parties is seen as more constructive than the war of words that has taken place in recent weeks, analysts said.
PA