Oil prices dropped about 5% to two-week lows as optimism increased that the United States and Iran were moving closer to a peace deal. Brent crude fell to $98.50 a barrel and US West Texas Intermediate fell to $91.78, with both at their lowest since May 7. Trump said Washington and Iran had largely negotiated an understanding to reopen the Strait of Hormuz, a route carrying a fifth of global oil and liquefied natural gas shipments. Remaining issues include a supply shortfall of 10–11 million barrels per day and the time needed to restore Middle Eastern production. Iran’s negotiators met in Doha, while Iran said it was negotiating an end to the war and not discussing nuclear issues. Analysts expected restricted physical flows through the strait to persist for months, even as some LNG tankers exited.
"Oil prices fell about 5pc to two-week lows on Monday as optimism grew that the United States and Iran were moving closer to a peace deal, even though they remain at odds over key issues such as blockades on the Strait of Hormuz. Brent crude futures were down $5.04, or 4.9pc, at $98.50 a barrel at 1.27pm GMT and US West Texas Intermediatefutures were down $4.82, or 5pc, at $91.78. Both contracts traded at their lowest since May 7."
"US president Donald Trump said on Saturday that Washington and Iran had largely negotiated an understanding on a peace deal that would reopen the Strait of Hormuz trade route that carried a fifth of global shipments of oil and liquefied natural gas before the conflict. However, several difficult issues remain, with Mr Trump saying on Sunday that he had told his representatives not to rush into any deal."
""The underlying supply shortfall of 10-11 (million barrels per day) of crude oil does not go away immediately and will see markets still drawing inventories until Middle Eastern crude production is back online, which is months away," said Sparta Commodities analyst June Goh. Iran's top negotiator and its foreign minister were in Doha for talks with Qatar's prime minister on a potential deal with the US, an official briefed on the visit told Reuters on Monday, after Washington and Tehran played down hopes for an imminent breakthrough."
"Analysts expect a return to normal oil flows through the strait will take months, while damaged oil and gas facilities are repaired. "We continue to believe that the key factors for the oil market to watch should be the physical oil flows; and so far, flows through the Strait remain restricted," said UBS analyst Giovanni Staunovo. Two liquefied natural gas tankers were exiting the strait on Monday, heading to Pakistan a"
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