Oil Prices Steady Amid Fading Hopes for US-Iran Peace Deal

Oil prices have steadied at more than one-week highs after US President Donald Trump's comments on a potential peace deal between the US and Iran dimmed hopes of a resolution. The Strait of Hormuz, a crucial waterway for oil shipments, has been threatened with blockades, causing concerns among traders.

Brent crude futures fell 10 cents to $87.62 a barrel, while US West Texas Intermediate crude futures dropped 5 cents to $82.08 a barrel. These prices represent a slight decline after Monday's surge, when both benchmarks rose more than 5% to their highest since July 31st.

Analysts at KCM Trade attribute the recent gains and subsequent decline to the uncertainty surrounding the US-Iran peace talks. Tim Waterer, chief market analyst at KCM Trade, noted that 'there appears to be a gulf... between the US and Iran over what any agreement would actually look like.' This gap in expectations has led to a loss of optimism, causing oil prices to stabilize.

The situation remains precarious, with Saudi Aramco's Jazan refinery still offline due to Houthi attacks. The refinery is expected to restart on August 30th. Analysts also warn that the risk of further incidents and blockades in strategic waterways, such as the Strait of Hormuz and the Bab el-Mandeb, remains high.