Oil prices slipped nearly 6% 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 on the Strait of Hormuz.
Brent crude futures were down $6.01, or 5.8%, at $97.53 a barrel by 1125 GMT and U.S. West Texas Intermediate futures were down $5.65, or 5.9%, at $90.95. Both contracts traded at their lowest since May 7.
U.S. President Donald Trump had said on Saturday that Washington and Iran had largely negotiated an understanding on a peace deal that would reopen the Strait of Hormuz trade route that carried a fifth of global shipments of oil and liquefied natural gas before the conflict.
However, several difficult issues remain, with Trump saying on Sunday that he had told his representatives not to rush into any deal.
"The underlying supply shortfall of 10-11 (million barrels per day) of crude oil does not go away immediately and will see markets still drawing inventories until Middle Eastern crude production is back online, which is months away," said Sparta Commodities analyst June Goh.
