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LONDON, Sept 30 Reuters Oil prices declined on Monday and were on track to fall for the third month in a row as a strong supply outlook and questions around demand outweighed fears that Israeli strikes in Lebanon and Yemen could escalate conflict in the Middle East.

Brent crude futures for November delivery, expiring on Monday, lost 35 cents, or 0.5, to 71.63 a barrel as of 1344 GMT. U.S. West Texas Intermediate WTI futures fell 12 cents, or 0.2, to 68.06.

Both benchmarks had earlier gained more than 1.

Brent was on track to lose more than 9 monthonmonth, which would be its biggest decline since November 2022. WTI was set to decline more than 7 since the end of August.

On Monday prices had been supported by the possibility that Iran, a key producer and member of the Organization of the Petroleum Exporting Countries, may be directly drawn into a widening Middle East conflict.

Since last week Israel has escalated attacks, conducting strikes which have killed Hezbollah and Hamas leaders in Lebanon and hit Houthi targets in Yemen. The three groups are backed by Iran.

We suspect that some oil market participants will look past this escalation given that there still has not been a major physical supply disruption and Iran has not…