Brent crude oil drifted lower in late morning London trade after a speech by the US president was seen as reducing the threat of imminent military conflict, dealers said.
At 11.41 benchmark Brent crude contracts for November delivery were down 18 cents at $28.05.
In a prime-time speech aimed at skeptics and critics of his Iraq policy, Mr George W. Bush warned yesterday that Saddam threatens the US and its allies and that the danger "only grows worse with time".
But Mr Bush dropped his go-it-alone approach to Iraq and insisted Washington would work with a coalition of allies to address the threat that he sees from Baghdad. He said war with Iraq was neither imminent nor unavoidable.
Although the speech has broadly confirmed the tough US stance on Iraq, it has been seen as more calming than recent US rhetoric, analysts said.
PA