Shafaq News
Oil prices fell 6% to two-week lows on Monday, as optimismgrew that the United States and Iran were moving closer to a peace deal, eventhough they remain at odds over key issues, such as blockades on the Strait ofHormuz.
Brent crude futures fell $5.85, or 5.7%, to $97.69 a barrelby 0343 GMT, while U.S. West Texas Intermediate were at $90.85 a barrel, down$5.75, or 6%. Both contracts touched their lowest since May 7 earlier in thesession.
On Saturday, U.S. President Donald Trump said Washington and Iran had"largely negotiated" an understanding on a peace deal that wouldreopen the Strait of Hormuz, which had carried a fifth of global shipments ofoil and liquefied natural gas before the conflict.
"Not withstanding all the caveats and risks that remainto the peace deal and Strait of Hormuz, there is now some light at the end ofthe tunnel, which will bring some near-term oil price relief," said MSTMarquee analyst Saul Kavonic.
However, the two sides remain at odds on several difficultissues, with Trump saying on Sunday he had told his representatives not to rushinto any deal with Iran.
"We've been at this stage before, only for talks to break down. Therefore,the market will likely be more cautious about overreacting," said WarrenPatterson, head of commodities strategy at ING.
Analysts expect a return to normal oil flows through thestrait will take months, while damaged oil and gas facilities are repaired.
"The longer the crisis stretches, the more debatable itbecomes whether worldleaders genuinely want a quick end to disruptions," said Phillip Novaanalyst Priyanka Sachdeva.
U.S. energy firms responded to higher local energy prices byadding oil and natural gas rigs for the fifth week in a row, for the first time since February2025.
The rig count, an early indicator of future output, rose byseven to 558 in the week to May 22, its highest since June 2025. Even so, BakerHughes said the totalcount was still down eight rigs, or 1% below this time last year.
"Momentum indicators suggest markets are attempting tostabilise after last week’s aggressive selloff, but conviction remainsweak," Sachdeva said.
(Reuters)
Only the headline is edited by Shafaq News Agency.