Oil prices fell on Tuesday as a pause in U.S. and Iran hostilities raised hopes for a de-escalation in the Middle East.
Oil prices extended their losses on Tuesday as a temporary pause in fighting between the U.S. and Iran held, raising hopes for a renewed peace deal. International benchmark Brent crude futures fell by 2.07% to $86.53 a barrel, while U.S. West Texas Intermediate crude futures dropped 1.72% to $82.19 a barrel. President Trump continues to tease talks with Iran while maintaining that attacks could resume if a deal is not reached quickly. The administration announced a pause in hostilities over the weekend, which has weakened expectations of significant attacks on civilian and energy infrastructure. Analysts at Goldman Sachs suggest that Brent crude could moderate to $80 a barrel by year-end if the Strait of Hormuz fully reopens. Market volatility remains high as investors prepare for the Federal Reserve's July 29 rate decision. While oil prices are sensitive to Iran headlines, the stock market appears to be focusing more on corporate earnings rather than moving in lockstep with oil prices.