Oil heads higher as US-Iran peace talks in stalemate

Brent crude futures climbed $3.43, or 3.29 per cent, to $107.75 a barrel early on Monday after US President Donald Trump turned down an Iranian peace proposal meant to end the conflict and reopen the Strait of Hormuz. Business Recorder reported that West Texas Intermediate gained $2.14, or 2.32 per cent, to $94.55 a barrel. Hopes for a rapid breakthrough have dimmed following the rejection, although diplomatic efforts have continued.

Although Trump turned the plan down on Saturday, he told Axios on Sunday in a phone call that he expected American negotiators to hold more talks this week. Iran put forward the plan at the UN General Assembly last week, sending it to Washington through Qatari mediators. Sugandha Sachdeva of SS WealthStreet, a New Delhi-based research firm, identified $120 a barrel as the key resistance for Brent futures.

Brent was up 0.4 per cent over the previous week, while WTI slid 7.9 per cent on concerns that Washington may prohibit diesel exports to curb record prices. ANZ analysts said refined products are a pressure point, since record US diesel prices are adding to inflation risks. Crude exports from major Middle East producers climbed to 12.8 million barrels per day in September, the highest since the conflict began in February, according to preliminary Kpler data.