Oil prices extended Asian trade losses into Monday morning U.S. time as a draft proposal on a possible end to the U.S.-Iran war is now circulating after Iranian negotiators left Qatar, an official briefed on the negotiations said. Reuters Monday.
Oil price down 3% in Asian trade on Monday amid renewed optimism about a possible peace deal between the United States and Iran, following reports of mediation talks between Iran and Qatar over the weekend.
Iranian negotiators left Qatar on Sunday and a draft proposal is currently circulating for a possible follow-up meeting, the Reuters source said, without specifying what the draft proposal could possibly entail.
“Continuing hopes for some form of diplomatic progress, combined with the absence of any significant military escalation over the weekend, have eased some of the immediate pressure on prices for now,” Tim Waterer, chief market analyst at KCM Trade, was quoted as saying by Reuters earlier in the day.
“Our demands have been formulated in a very clear and transparent manner,” Esmaeil Baghaei, a spokesman for the Iranian Foreign Ministry, was quoted as saying by Reuters.
“These demands are reasonable and logical: no final agreement can be initiated, nor can the Strait of Hormuz be reopened or secured, unless the US naval blockade ends, Iran’s demands are respected and Iran’s legitimate demands are met,” the Iranian official said.
Iran said this weekend that the Strait of Hormuz could reopen within two days if its demands were met, faster than the week of reopening announced by Tehran in September.
US President Donald Trump rejected the Iranian proposal in September.
“Whether this will lead to anything remains to be seen,” ING commodities analysts Warren Patterson and Ewa Manthey. said in a Monday note, commenting on the Iran-Qatar mediation talks.
Monday morning, Brent price had fallen to $108.61 per barrel, down 4.25% on the day, and WTI crude fell 4.32% to fall below $100 a barrel, to $99.62.
Nevertheless, the market fears that further US-Israeli strikes against Iran may come after the US mid-term elections.
“Given that many of the key developments in this conflict took place over the weekends, the market may have to hold its breath until the end of the week,” ING strategists said.
By Charles Kennedy for Oilprice.com
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