Oil Prices Steady as US-Iran Peace Deal Hopes Dim

Oil prices steadied on Tuesday at more than one-week highs as hopes of a US-Iran peace deal to end their war and reopen the Strait of Hormuz dimmed.

The demand for compensation by President Donald Trump is likely to complicate efforts to reopen the strategic oil waterway, with Brent crude futures falling 10 cents or 0.11% to $87.62 a barrel and U.S. West Texas Intermediate crude futures down 5 cents or 0.06% to $82.08 a barrel.

Tim Waterer, chief market analyst at KCM Trade, said there appears to be 'a gulf' between the US and Iran over what any agreement would actually look like, giving oil prices a bid tone as some of the optimism from last week is unwound.

The Strait of Hormuz has been a major concern for markets, with analysts at Barclays noting that crude oil and refined product net exports through the waterway averaged 3 million barrels per day in the week ending August 7, down from 4.4 million bpd the previous week.