Oil prices dropped early Monday as signs grew that the US and Iran are seeking a diplomatic end to the war, CNBC and Reuters report. CNBC says Brent crude futures for January fell 3.91% to $109.00 a barrel early Monday, Eastern time. US West Texas Intermediate futures for December fell 4.1% to $99.85, below $100.

Reuters reported a smaller drop earlier in Asian trading, with Brent down 1.40% at $111.84 and WTI at $102.56. Brent ended October at its highest level in six months, Reuters says.

Secretary of State Marco Rubio said President Trump would like to end the war with Iran "diplomatically," CNBC reports. "We would prefer to do it peacefully," Rubio said. Iran also signaled that a deal is still possible after two days of talks mediated by Qatar, CNBC reports, citing Al Jazeera. Iranian Foreign Minister Abbas Araqchi said the talks were "ongoing and progressing," Reuters reports.

Still, Iranian Supreme Leader Mojtaba Khamenei on Saturday called for the armed forces to meet "any level or type of threat" with an immediate response, CNBC reports. "Hope springs eternal," said Tamas Varga, an analyst at PVM Oil Associates.

Tim Waterer of KCM Trade called the drop "a technical pullback" after last week's strong gains, Reuters reports. He said Brent could still climb toward $120 after the midterm elections if tensions rise. OPEC+ kept its December output targets steady on Sunday, according to Reuters.

What we know: Oil prices fell sharply as talks with Iran continued.
What we don't: Whether the talks will produce a deal, or whether fighting will resume after Tuesday's US elections.