WTI rally takes a timeout amid signs of US-Iran war de-escalation

• The Oil price corrects further amid hopes that the renewed war between US and Iran won’t last long.

• A US official confirms that technical talks with Iran are intact.

• The Fed is highly anticipated to deliver at least one interest rate hike this year.

West Texas Intermediate (WTI) Oil futures on NYMEX trade slightly lower to near $71.50 during the European trading session on Friday. The Oil price extends its correction after posting a fresh over two-week high at $75.73 on Wednesday.

The black gold has come under pressure amid signs of de-escalation in the restart of the war between the United States (US) and Iran.

Earlier in the day, a US official confirmed that technical talks with Iran continued, despite President Donald Trump declaring that the memorandum of understanding (MoU) with Tehran is over.

US President Trump also said late Wednesday that he had a conversation with Iran, adding that the nation wants the deal badly. However, he doesn’t believe that Iran would honor the deal, CNBC reported.

Meanwhile, the downside in oil prices will likely remain limited, as the exchange of attacks between the US and Iran are still going on. Late Thursday, the Iranian state media confirmed US forces striking several more locations in coastal Iran. However, the US military forces have not confirmed the same. The scenario of continuing US-Iran aggression would keep fears of energy supply disruption intact.

On the demand front, fears of interest rate hikes by global central banks would likely keep the overall oil demand battered. The CME FedWatch tool shows that the odds of the Federal Reserve (Fed) delivering at least one interest rate hike this year are marginally over 80%.