Crude oil prices fall as markets expect a ceasefire between the US and Iran

Crude oil prices fell slightly on September 25 after a week of gains as markets assessed the prospects of a ceasefire between the US and Iran amid attacks by Houthi rebels on Saudi Arabia, Reuters reports.

As of 02:12 GMT, Brent crude fell 87 cents, or 0.82%, to $105.73 a barrel, while West Texas Intermediate (WTI) crude fell $1.56, or 1.65%, to $93.05 a barrel.

The difference between Brent and WTI prices reached $12.68 a barrel, the widest spread since May, when it exceeded $13.

One of the main reasons for the divergence is concern over a possible US ban on diesel fuel exports, which could lead to a surplus in the domestic market. The two oil benchmarks usually move in tandem, although the US contract typically trades at a discount.

“The extremely wide WTI-Brent spread also reflects different regional risk profiles,” said Tim Waterer, chief market analyst at KCM Trade.

Sources familiar with the talks said US and Iranian representatives in New York are discussing a phased plan to end the war. The plan would involve Tehran restoring operations in the Strait of Hormuz and Washington lifting its economic blockade of Iran.

Saudi Arabia is increasing crude oil shipments through the East-West pipeline to the export hub of Yanbu on the Red Sea coast. However, according to industry sources, crude oil tanker loadings have not yet resumed.

Tags: prices