(April 25): Oil fell to intraday lows amid fresh signs that elusive peace talk plans between the US and Iran may materialise after all, stoking hopes of a resumption to flows though the vital Strait of Hormuz.
West Texas Intermediate (WTI) futures dipped 2%, falling to near US$93 a barrel on simultaneous reports that the US and Iranian delegations will convene in Pakistan soon. CNN reported that US President Donald Trump will send US special envoy Steve Witkoff and Jared Kushner to Pakistan for talks with Iranian Foreign Minister Abbas Araghchi this weekend. Tehran sounded a more pessimistic tone on the prospects of further negotiations.
The development erased some of the geopolitical premium that had been added to prices earlier this week, driven by uncertainty over talks, escalating rhetoric and rising military threats. Traders had been closely tracking the movements of both delegations for signals on whether peace talks will materialize and offer some relief as the strait — which connects the Persian Gulf to global markets — remains largely shut.
Recent developments “suggest that traders are getting increasingly comfortable with the idea that the kinetic phase of the US-Iran conflict is ending, or has already ended, and that an economic war is becoming entrenched,” said Thierry Wizman, Global FX & Rates Strategist at Macquarie Group.
Prices:
- WTI for June delivery fell 2% to US$93.99 a barrel at 12.09pm in New York.
- Brent for June settlement was dipped to US$104.53 a barrel.
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