Oil prices trended downward on Tuesday, following sharp gains in the previous session, as market focus remains locked on whether progress is being made in peace talks between the United States and Iran.
اضافة اعلان
U.S. President Donald Trump said on Monday that talks with Iran are ongoing, whereas the Tasnim News Agency reported that Tehran had suspended indirect negotiations with Washington.
Brent crude futures fell 75 cents, or 0.79%, to $94.23 a barrel by 04:34 GMT, while U.S. West Texas Intermediate (WTI) crude futures dropped 85 cents, or 0.92%, to $91.31 a barrel.
Both benchmarks had jumped by more than 5% in the previous session, after posting a monthly loss of over 16% in May on hopes of a potential deal.
"While markets were hoping to look past the uncertainty on expectations of a potential breakthrough, nothing seems to have changed for oil as of this morning," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Trump told CNBC yesterday that ending the talks is not a concern for him. Shortly after, he posted on social media saying that discussions with Iran are continuing, and told ABC News that he expects a deal to maintain the ceasefire and reopen the Strait of Hormuz "within the next week."
Tim Waterer, chief market analyst at KCM Trade, noted: "The market is currently focused on whether there is any tangible progress or setbacks in the US-Iran negotiations, the tone and substance of remarks coming from both sides (particularly Iran’s threats regarding the Strait of Hormuz), and actual tanker movements through the waterway."
Waterer added that the status of the U.S.-Iran negotiations at any given time will ultimately dictate whether the current risk premium remains baked into oil prices or begins to unwind.
On Monday, Lebanon announced a partial ceasefire between Hezbollah and Israel, in what could be seen as a limited de-escalation of the conflict that has fueled the broader war with Iran.
Iran has effectively halted all non-Iranian shipments entering and leaving the Gulf since the onset of the war, choking off about a fifth of global oil and liquefied natural gas (LNG) flows and driving prices up by 50% or more.
Vessel-tracking estimates released on Monday showed that U.S. crude oil exports jumped to a record 5.6 million barrels per day in May, as the Middle East crisis boosted demand from Asian and European refiners for U.S. oil.
Shipping executives meeting in Athens on Monday said that any agreement reached between the United States and Iran must provide clear rules allowing vessels to resume normal operations through the Strait of Hormuz.
Reuters
