Oil falls more than 1% on reports of possible US-Iran ceasefire deal

Brent crude futures for July fell 1.32% or $1.24 to $92.47 a barrel

Oil futures fell more than 1% on Friday. were on track for their steepest weekly decline since early April, following ​reports that the US and Iran had reached a potential deal to ‌extend a ceasefire.

Brent crude futures for July fell 1.32% or $1.24 to $92.47 a barrel at 0656 GMT. US oil futures fell $1.38, or 1.55%, to $87.52 a barrel.

Brent has plunged 10.5% this week - the steepest ​fall since the week that ended on April 6. while WTI has ​dropped 9.2% - the biggest weekly loss since the week that ended ⁠on April 13.

The US. Iran reached an agreement on Thursday to extend a ​ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources toldReuters, ​though US President Donald Trump has yet to approve it and Iranian state media said it had not been finalised.

"Consensus remains that the conflict is over, and a deal is coming. As ​long as this narrative holds. crude oil has room to extend its decline ​toward trendline support in the low $80s," IG analyst Tony Sycamore said.

Read:Oil surges after Iran targets US airbase in retaliation

Prices have been volatile in recent ‌sessions, swinging ⁠by as much as $6 for both benchmarks on conflicting signals over a possible end to the three-month-old Iran war. the potential reopening of the Strait of Hormuz, a conduit for roughly a fifth of the world's oil and liquefied natural gas ​supplies.

Recovery remains uncertain

Traffic through ​the maritime chokepoint ⁠remains a small fraction of the pre-war level. Analysts at ING said a reopening of the waterway would offer some immediate relief ​to the oil market,. a recovery is still uncertain.

"Upstream ​oil production ⁠has fallen significantly since the war. with producers shutting in production in order to manage storage constraints," ING said in a note. "The recovery in upstream production will be gradual ⁠rather than ​immediate".

"Refineries in the region need to ramp up ​output. This will take time, given that some of this infrastructure was targeted in attacks earlier in the ​conflict".

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