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Oil Pares Gains as Iran Halts Strikes Against Israel

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Oil Pares Gains as Iran Halts Strikes Against Israel

Oil prices were higher in Monday trading, but off session highs as Iran reportedly halted military operations against Israel after fresh clashes erupted between the two countries.

West Texas Intermediate crude oil was up 1.4% at $91.76 a barrel in midday trade, after rising to as high as $95.47 earlier in the day. Brent rose 1.8% to $94.73, having traded at $98.08 earlier in the session.

Iran has suspended strikes against Israel, the former's Ministry of Foreign Affairs told CNBC on Monday. The two countries traded strikes on Sunday night, according to reports.

However, Tehran vowed to resume attacks if Israel continues to target Iran-backed Hezbollah in Lebanon, according to the CNBC report.

"Iran's restraint is a positive for diplomacy," Tudor Pickering Holt Analyst Matt Portillo said in a note.

Israel said its operations in Lebanon will continue "to remove the Hezbollah terror threat to our citizens," CNN reported, citing the Israeli Prime Minister's Office message to government ministers on Monday.

Last week, Israel and Lebanon agreed to implement a ceasefire, subject to Hezbollah ending all fire and evacuating its operatives from the South Litani Sector, according to a joint statement from the US, Israel and Lebanon.

"Overall, the situation remains fragile, and for the oil market, the status quo holds: global inventories continue to draw, with analysts increasingly convinced that inventories will reach dangerously low levels by the end of June (if not sooner)," Portillo said.

Trump said both Israel and Iran were looking for "an immediate ceasefire."

"Final negotiations on 'peace' are proceeding, subject to ignorance or stupidity getting in its way," Trump said in a social media post on Monday. "The blockade (against Iran) will remain in place, and in full force and effect, until a 'final deal' is reached. Things should move quickly."

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