Shafaq News

Oil prices trended lower on Tuesday following the previoussession's sharp gains as the market remained cautious about progress inU.S.-Iran peace talks.

U.S. President Donald Trump said on Monday talks with Iranwere ongoing, while Tasnim news agency reported earlier that Tehran hadsuspended indirect negotiations with Washington.

Brent crude futures lost 75 cents, or 0.79%, to $94.23 abarrel at 0434 GMT, while U.S. West Texas Intermediate fell 85 cents, or 0.92%,to $91.31 a barrel.

Both benchmarks rose more than 5% in the previous session,having posted a monthly loss of more than 16% in May on hopes of a peace deal.

"While markets had hoped to move past the uncertaintyamid prospects of a ⁠potentialdeal, nothing appears to have changed for oil as of this morning," saidPriyanka Sachdeva, senior market analyst at Phillip Nova.

In an interview with CNBC on Monday, Trump said he did notmind if the talks were over. But shortly after, he issued a social media postsaying talks with Iran were continuing and told ABC News that he expected adeal to extend the ceasefire and reopen the Strait of Hormuz “over the nextweek”.

"The market is currently focused on whether there's anyconcrete progress or setbacks in U.S.-Iran negotiations, the tone and substanceof statements from both sides (particularly Iran's threats regarding the Straitof Hormuz), and actual physical tanker movements through the waterway,"said Tim Waterer, chief market analyst at KCM Trade.

The status of the U.S.-Iran negotiations at ⁠any given point will ultimatelydetermine whether the current risk premium stays embedded in oil prices orstarts to unwind, Waterer added.

Lebanon on Monday announced a partial ceasefire betweenHezbollah and Israel, in what would amount to a limited de-escalation of aconflict that has inflamed the broader war with Iran.

Iran has effectively halted nearly all non-Iranian shippinginto and out of the Gulf since the war began, choking off about ⁠a fifth of global oil andliquefied natural gas flows and driving prices up by 50% or more.

U.S. crude exports climbed to a record 5.6 million barrelsper day in May as the Middle East crisis pushed up demand for the country's oilfrom Asian and European ⁠refiners,ship tracking estimates showed on Monday.

According to a preliminary Reuters poll released on Monday,U.S. crude stockpiles are expected to have fallen by about 3.6 million barrelsin the week ended May 29, extending the prior week's draw, while distillatesand gasoline ⁠inventoriesalso are likely to have declined.

Shipping executives meeting in Athens on Monday said thatany peace deal worked out between the U.S. and Iran would need to offer clearrules allowing vessels to resume normal business via the Strait of Hormuz.

(REUTERS)

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