Oil prices near one-week low after US, Iran pause fighting over weekend

By Seher Dareen

LONDON , July 27 (Reuters) - Oil prices hovered astir a one-week debased connected Monday aft the U.S. and Iran paused strikes implicit the play pursuing 2 weeks of attacks, raising hopes of a diplomatic solution that would de-escalate the ‌conflict and let shipping to resume successful the Strait of Hormuz.

Brent crude futures fell $5.85, oregon astir 6%, to $90.93 a ‌barrel by 1309 GMT. They fell arsenic debased arsenic 9.5% earlier successful the league to $87.55 a barrel.

U.S. West Texas Intermediate crude was astatine $84.33 a barrel, down $4.98, oregon ​around 5.6% and going arsenic debased arsenic 8% earlier successful the time to $82.12 a barrel.

Both contracts were trading astatine their lowest levels since July 20 earlier successful the session.

Brent had reached $100 per tube arsenic the conflict, which reduced lipid shipments via the Strait of Hormuz, spilled implicit to the Red Sea, hindering exports from the world's apical exporter, Saudi Arabia, via the Bab el-Mandeb strait to Asia.

The U.S. ambassador to the ‌United Nations, Mike Waltz, told "Fox News Sunday" and ⁠other U.S. media that President Donald Trump had decided to intermission U.S. attacks to let much clip for diplomacy.

"The marketplace seems to beryllium everlastingly seeking bully quality from an arena that truly is not providing ⁠any," said PVM expert John Evans.

"A enactment of subject strikes mightiness look an improvement, but it does not travel with immoderate guarantees that lipid volition soon travel from the area... prices volition lone proceed little if precocious prices erstwhile again dent demand, not questionable mini-ceasefires."

Prices pared losses passim the ​day ​after Saudi Arabia's aerial defences intercepted and destroyed drones launched from Iraq ​that attempted to people lipid facilities successful the kingdom's ‌Eastern Province and Riyadh and the country's overseas ministry said they held a close to respond to the sources of "the aggression."

Yemen's Iran-aligned Houthis besides said they targeted a fig of delicate crude lipid proviso and transport sites linking eastbound Saudi Arabia to the Red Sea metropolis of Yanbu.

OUTLOOK UNCERTAIN WITH NO SIGNED FRAMEWORK

"There's nary signed framework, nary verification mechanics and nary agreed timeline, arsenic acold arsenic what we tin spot is it looks similar the 2 sides person stopped shooting since Friday," said Ole Hvalbye, marketplace expert astatine SEB Research.

Fewer ‌than 10 commodity vessels passed done the Strait of Hormuz regular during the ​weekend, shipping information from Kpler showed.

"Flows fell to thing similar 15% of pre-war ​levels, against a mean tally complaint of astir 20 cardinal ​barrels a time of crude, condensate and products. A governmental intermission doesn't enactment a azygous other tube ‌on the h2o close present and now," Hvalbye added.