WTI falls below $70.00 on US-Iran ceasefire talks uncertainty

• WTI price drifts lower to near $69.80 in Monday’s early European session. 
• US and Iran will resume talks after days of renewed attacks. 
• The API weekly crude oil report will be published later on Tuesday.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $69.80 during the early European trading hours on Monday. The WTI price declines amid uncertainty surrounding US-Iran talks. 

Axios reported on Monday that the US and Iran have agreed to halt attacks and plan to meet in Doha, Qatar, on Tuesday to resolve their dispute over the Strait of Hormuz. This action came after renewed military strikes between Washington and Tehran over the weekend. Iran’s neighbors, Kuwait and Bahrain, also reported incoming missiles and drones overnight.

A US official said that “both sides will stand down for now, and vessels can move freely.” ING strategists noted that traders appeared to be too optimistic about the timeline for a recovery in Persian Gulf oil supplies. 

“Even so, participants appear to be shrugging off these developments, instead focusing on what a continued recovery in oil flows would mean for the global balance,” said ING’s Warren Patterson and Ewa Manthey. 

Traders await the release of the American Petroleum Institute (API) weekly crude oil report, which is due later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might undermine the WTI price.