Oil price falls to $97

Oil prices fell on Thursday after a ‌ceasefire deal between Israel and Lebanon boosted hopes for a broader agreement to end the US-Israeli war with Iran that could lead to a reopening of the Strait of Hormuz.

Trade was cautious though and the decline was limited. Brent futures ​were down 77 cents, or 0.8 percent, at $97.03 a barrel by 0729 GMT, while US West Texas Intermediate ​crude fell 70 cents, or 0.7 percent, to $95.32.

The two contracts rose about 2 percent on Wednesday after renewed Middle East hostilities, including Iranian attacks on Kuwait and US military strikes near the ​Strait of Hormuz.

Israel and Lebanon said late on Wednesday they had agreed to implement a ceasefire, raising hopes ​for a deal between Washington and Tehran, which has conditioned any agreement in part on an end to fighting between Israel and Lebanon.

“Iran insists on a halt to Israel’s aggression toward Lebanon, meaning Hezbollah, and indeed there does seem ​a breakthrough,” PVM Oil analyst John Evans said.

US President Donald Trump suggested on Wednesday that there could ​be progress in negotiations with Iran as soon as this weekend.

Iranian Foreign Minister Abbas Araqchi on Wednesday said Tehran’s contacts ‌with Washington have not been cut off, but no progress has been made in the negotiations, adding both sides were studying the texts that were exchanged.

In the US, the Republican-led House approved a resolution on Wednesday to block Trump from continuing the war against Iran.

To take effect, the resolution would need ​Senate approval and two-thirds ​majorities in both chambers to override an almost certain Trump veto.

“In our view, the path of least resistance for prices remains to the upside as long as flows remain ​restricted,” UBS analyst Giovanni Staunovo said.

Meanwhile, US crude stockpiles fell by 8 million ​barrels to ⁠433.7 million barrels in the week ended May 29, the Energy Information Administration said on Wednesday. That was a much bigger drop than the 4-million-barrel draw analysts had expected in a Reuters poll.

Slowing Chinese demand has ⁠also helped ​temper rising prices.

Iranian oil prices slipped into discounts for the first ​time since April, while Russian crude premiums eased as traders cut prices to entice Chinese buyers amid sluggish demand, trade sources ​said.