WTI eases below $103.50 as US, Iran reportedly seeking 45-day ceasefire

• WTI price declines to near $103.30 in Monday’s early European session. 

• A deal for a 45-day ceasefire is in discussion. 

• OPEC+ agreed to boost output once Hormuz reopens. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $103.30 during the early European trading hours on Monday. The WTI price retreats after reports that the United States (US) and Iran are making a push for a 45-day ceasefire. 

The US, Iran and a group of regional mediators are discussing the terms ‌for a potential ceasefire that could lead to a permanent end to the war, Bloomberg reported on Monday, citing Axios. Optimism surrounding the peace deal between the US and Iran could weigh on the WTI price.

Nonetheless, the Strait of Hormuz, which carries oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates, remains largely closed due to Iranian attacks on shipping after the war began on February 28. This, in turn, might cap the downside for crude oil prices in the near term. 

On Sunday, the Organization of the Petroleum Exporting Countries and allies (OPEC+) agreed to a modest rise of 206,000 barrels per day (bpd) for May. The move was expected, with reports saying the group that is managing their production stands ready to start adding barrels quickly should the situation in the Persian Gulf change.

Traders await the release of the American Petroleum Institute (API) report, which will be published later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might weigh on the WTI price.