Crude oil prices extend losses on hopes of easing Middle East tensions

New Delhi: Global crude oil prices declined more than a per cent on Tuesday, extending losses from the previous session after US President Donald Trump indicated that Washington would hold off on fresh military strikes against Iran for the time being, easing concerns over prolonged disruptions to energy supplies from the Middle East.

Brent crude futures declined $1.24 or 1.33 per cent to $91.33 per barrel, while US West Texas Intermediate (WTI) crude futures fell 1.5 per cent or $1.31 to $85.54 per barrel.

Brent crude had settled 5.85 per cent lower in the previous session after touching its lowest level since August 31.

Market experts said crude prices had come under pressure amid signs of diplomatic progress in the Middle East, although continuing geopolitical tensions and uncertainty over the security of shipping routes could limit the downside.

“Investors are also awaiting monthly oil supply and demand reports from the US Energy Information Administration (EIA), the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) for fresh cues on the global demand and supply outlook,” according to them.

Elsewhere, Russian and Ukrainian officials are scheduled to meet on Tuesday for two days of US-brokered talks, their first such meeting since February.

Reports claim that Trump has said that he planned to hold off on further military strikes against Iran following appeals from regional countries, including Qatar. He made the remarks after meeting Qatar’s Prime Minister at the White House.

However, the American President indicated that the naval blockade in the Strait of Hormuz would remain in place for now, keeping concerns over the security of a key global energy supply route alive.

Meanwhile, senior US and Gulf officials have expressed doubts over the possibility of an imminent peace agreement between Washington and Tehran, as per reports.

However, Iran’s security council chief Mohsen Rezaei rejected reports of ongoing negotiations, saying the US should stop spreading what he described as fake news about imaginary talks.

Meanwhile, gold prices also edged lower on Tuesday, trading around $4,120 per ounce, as investors awaited a key US inflation report for clues on the Federal Reserve’s monetary policy trajectory.