WTI Oil holds around $87.00 as the US-Iran peace process teeters

• WTI Oil prices consolidate around $87.00, nearly 10% above Friday’s lows.
• Escalating tensions between the US and Iran have triggered a significant recovery in Oil prices.
• Markets remain hopeful that a peace deal is still possible, which is keeping prices below the key $100 line.

Crude prices edged lower during Monday’s European trading session, with the US benchmark West Texas Intermediate (WTI) barrel changing hands at $86.85 at the time of writing. This is down from session highs at $88.50, but significantly above Friday’s lows, at $78.90.

Downbeat news from the Middle East has curbed investors’ optimism about the fate of the US-Iran peace process, and has buoyed Crude prices from last week’s lows. Investors, however, maintain some hopes that talks might resume, which is keeping prices below the key $100 level so far.

Iranian foreign ministry spokesperson Esmail Baghaei affirmed earlier on Monday that Tehran has no plan to attend a second round of negotiations due to “aggressive acts” and violation of the ceasefire by the US.

Baghaei is highly likely referring to the seizure of an Iranian-flagged cargo vessel by the US army in the Gulf of Oman on Sunday. Tehran vowed retaliation, and Iranian state media suggested that the Islamic Republic might skip the peace talks scheduled to resume in Pakistan on Tuesday.

WTI Oil prices are now trading at levels nearly 10% above Friday’s lows but still well below the $106.50 area where they were in early April before the announcement of the ceasefire, or the nearly 5-year high at $113.28, reached after the first week of the war in March.