NEW YORK: Oil prices slipped US$1 per barrel on Monday (Jun 16) in volatile trading after reports that Iran is seeking an end to hostilities with Israel, raising the possibility of a truce and easing fears of a disruption to crude supplies from the region.
Brent crude futures settled US$1, or 1.35 percent, lower to US$73.23 a barrel. US West Texas Intermediate crude futures fell US$1.21, or 1.66 percent, to US$71.77 per barrel.
Iran has asked Qatar, Saudi Arabia and Oman to press US President Donald Trump to use his influence on Israel for an immediate ceasefire in return for Tehran’s flexibility in talks about its nuclear program, two Iranian and three regional sources told Reuters. Earlier, the Wall Street Journal had reported Iran was seeking a truce.
Traders pared bets that bombing by both sides could turn into a broader, regional war that would threaten energy infrastructure, Mizuho analyst Robert Yawger said.
On Friday, oil prices surged more than 7 percent after Israel began bombing Iran over claims Tehran was close to securing an atomic bomb.
Friday’s surge put oil in “overbought territory” in terms of technical indicators, which is typically followed by a downward move, said Rory Johnston, an energy analyst and founder of the Commodity Context newsletter.
“As I see it, the initial run up in prices on Thursday/Friday was fueled by a large inflow of speculative cash, which brought us back into overbought spec positioning levels,” Johnston said.
“When you’re in that state, the market is especially vulnerable to sharp liquidations,” Johnston added.
