Introduction

Oil prices trended lower on Tuesday following the previous session’s sharp gains as the market remained cautious about progress in U.S.-Iran peace talks. U.S. President Donald Trump said on Monday talks with Iran were ongoing, while Tasnim news agency reported earlier that Tehran had suspended indirect negotiations with Washington.

Market Reaction

Brent crude futures lost 75 cents, or 0.79%, to $94.23 a barrel 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.

Analysis

According to Stephanie Kelly from Reuters, the market is currently focused on whether there’s any concrete progress or setbacks in U.S.-Iran negotiations, the tone and substance of statements from both sides, and actual physical tanker movements through the waterway. Tim Waterer, chief market analyst at KCM Trade, added that the status of negotiations will determine whether the current risk premium remains embedded in oil prices or starts to unwind.

Expert Insights

As reported by KLSE Screener, the content is a snapshot from Publisher, and for accurate information, one should refer to the original content. Meanwhile, Yahoo Finance reported that oil prices pulled back off their highs on Monday after President Trump said talks between the US and Iran were ongoing despite headlines that Iran had stopped engaging with negotiators over Israel’s actions in Lebanon.

Conclusion

In conclusion, the ongoing talks between the US and Iran have led to a cautious market, with oil prices trending lower. The market is awaiting concrete progress or setbacks in the negotiations, which will determine the direction of oil prices. As Bloomberg News reported, oil steadied after its biggest gain in about a month, as uncertainty about the state of US-Iran peace talks raised the risk that energy flows from the Persian Gulf could be curtailed for longer.