Oil prices steady post biggest gain in a month on US-Iran talks uncertainty

Oil prices steadied post their biggest gain in a month as uncertainty regarding the state of the Iran peace talks increased the risk that energy flows via the region could be curtailed for a while longer.

Brent for August delivery was near $95 a barrel after it added 4.2% in the prior session, while the West Texas Intermediate was under $92 a barrel.

Prices surged Monday on a report that Tehran was halting talks with Washington in protest against Israel’s attacks in Lebanon, before paring gains after US President Donald Trump said the negotiations were continuing.

The US leader said a memorandum of understanding with Iran to reopen the Strait of Hormuz could happen over the next week, according to a telephone conversation he had with ABC News. Washington still had “to get a few more points” before a deal, he said.

The lack of clarity over the potential extension of the current ceasefire — and the future of energy flows through the Strait of Hormuz — has buffeted oil prices, which fell last month on optimism a deal could be reached. The report by Iran’s semi-official Tasnim news agency also said that Tehran and its regional proxies have placed on their agenda the complete closure of Hormuz, as well as the Bab el-Mandeb Strait at the southern end of the Red Sea — a crucial alternative for oil exports.

Adding to the confusion, Trump and Israeli Prime Minister Benjamin Netanyahu offered differing accounts of a call about the fighting in Lebanon. A US-brokered ceasefire between Tel Aviv and Iran-backed Hezbollah should be extended from Beirut to include the entirety of Lebanese territories, with more negotiations taking place on Tuesday and Wednesday, the Lebanese presidency said in a post.

With inputs from Bloomberg