Oil prices slipped more than $5 to two-week lows on Monday, as optimism grew that the United States and Iran were moving closer to a peace deal, even though they remain at odds over key issues such as blockades in the Strait of Hormuz.
Brent crude futures were down $5.09, or 4.9%, to $98.45 a barrel at 0705 GMT, while U.S. West Texas Intermediate futures were at $91.38 a barrel, down $5.22, or 5.4%. Both contracts touched their lowest since May 7 earlier in the session.
On Saturday, U.S. President Donald Trump said Washington and Iran had "largely negotiated" an understanding on a peace deal that would reopen the Strait of Hormuz, which carried a fifth of global shipments of oil and liquefied natural gas before the conflict.
"Notwithstanding all the caveats and risks that remain to the peace deal and Strait of Hormuz, there is now some light at the end of the tunnel, which will bring some near-term oil price relief," said MST Marquee analyst Saul Kavonic.
However, the two sides remain at odds over several difficult issues, with Trump saying on Sunday he had told his representatives not to rush into any deal.
