- Oil prices drop 2%, extending previous session's heavy losses
- Al Arabiya reports possible easing of U.S. blockade
- Analysts warn prices could rebound if conflict escalates again
LONDON, May 7 (Reuters) - Oil prices extended losses on Thursday, sliding around 2% to below $100 a barrel on renewed hopes for a U.S.-Iran peace deal that could bring a gradual reopening of the Strait of Hormuz.
Brent crude futures fell $1.95, or 1.93%, to $99.32 a barrel by 0912 GMT. U.S. West Texas Intermediate dropped $1.93, or 2.03%, to $93.15.
Thursday's session was volatile, with Brent trading in a range of up 1% to down 3.8% versus the previous close.
Both benchmarks slumped more than 7% on Wednesday, hitting two-week lows on optimism over a possible end to the Middle East war.
Price drops continued into Thursday, as investors reacted to fresh headlines of progress towards potential peace talks.
Analysts flagged a report from Saudi Arabia's Al Arabiya news channel that understandings have been reached to ease the U.S. blockade in exchange for a gradual reopening of the Strait of Hormuz, and another by Israel's Channel 12 that Iran allegedly agreed to transfer its stockpile of 60% enriched uranium to a third country. Reuters could not immediately verify the contents of either report.
Both benchmarks slumped more than 7% on Wednesday, hitting two-week lows on optimism over a possible end to the Middle East war.
Price drops continued into Thursday, as investors reacted to fresh headlines of progress towards potential peace talks.
Analysts flagged a report from Saudi Arabia's Al Arabiya news channel that understandings have been reached to ease the U.S. blockade in exchange for a gradual reopening of the Strait of Hormuz, and another by Israel's Channel 12 that Iran allegedly agreed to transfer its stockpile of 60% enriched uranium to a third country. Reuters could not immediately verify the contents of either report.
"While peace negotiations are likely to continue at least until next week's U.S.-China summit, the outlook beyond that remains uncertain," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.
Reporting by Robert Harvey in London, Yuka Obayashi in Tokyo and Emily Chow in Singapore Editing by David Goodman and Susan Fenton
Source: Reuters