Oil futures fell for a third straight session on Tuesday, with Brent settling at $84.09 and WTI at $79.26 — global prices at their lowest in about two weeks. The slide came as Israeli Prime Minister Benjamin Netanyahu met U.S. President Donald Trump in Washington to discuss their war with Iran, while both sides held off on further strikes. Iran's Foreign Ministry, however, denies that peace talks are underway.
The Brent crude contract for September delivery tumbled 4.8% to settle at $84.09 on Tuesday, the front-month contract's lowest settlement since July 13, according to Dow Jones Market Data. The West Texas Intermediate September contract shed 4.1% to end at $79.26, its lowest level since July 16. Both contracts fell for a third session in a row.
Diplomacy hopes collide with Tehran's denial
Netanyahu met Trump to discuss their war with Iran as the U.S. and Iran continued a mutual pause in strikes that began over the weekend. Trump told Axios on Monday that he had paused the strikes to allow time for negotiations with Tehran.
Esmaeil Baghaei, a spokesman for Iran's Foreign Ministry, contradicted that account. He said in a televised press conference Monday that Tehran is not currently engaged in peace talks with Washington.
Tariq Zahir, managing member at Tyche Capital Advisors, called the selling in crude overdone. According to MarketWatch, Zahir said: "history has shown us that Iran hasn't been willing to agree to anything."
Worst three-day stretch in more than six years
Brent tumbled roughly 16% across the past three sessions, its worst three-day run in more than six years. The last time the global benchmark slumped that hard was April 2020, when threats of an oil glut were rattling markets.
Technical factors amplified the move. Trend-following commodity trading advisers cut long positions to 62% long in Brent on Tuesday, compared with 73% at the end of Monday's session. Futures are also recalibrating after the relative strength index spent much of last week in overbought territory, leaving room for further downside.
Supply data and the Fed pull traders elsewhere
The American Petroleum Institute estimated that U.S. crude oil inventories rose by 3.296 million barrels in the week ending July 24, after growing by 2.603 million barrels in the week prior. OPEC+ meanwhile expects to pause production quota hikes after a final increase in September as it evaluates the supply impact of the Iran war, two delegates said.
Traders are reluctant to take positions for now, Zahir said, and are instead focusing on Big Tech earnings and the Federal Reserve's interest-rate policy decision this week. He expects crude to take center stage again later this week once there is clarity on what happens in the Middle East, and said the risk in his opinion is to the upside for prices.
Sources: MarketWatch, Rigzone, Oilprice.com
Trading involves risk.
Risk Disclaimer
