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Oil Retreats as Iran Talks Progress, Inflation Pressures Ease: Commerzbank

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President Donald Trump said Iran is making major concessions in negotiations, while Secretary of State Marco Rubio said technical-level talks between the two countries are progressing ahead of another meeting scheduled for next Tuesday, according to Commerzbank.

Brent crude prices fell back to around US$72.50 per barrel, roughly where they traded before the recent conflict involving Iran, Commerzbank said in a note.

U.S. Energy Secretary Chris Wright said shipping conditions are improving, but a full return to normal operations in the Strait of Hormuz could take several weeks. He added that Iran would not be able to disrupt the key waterway in the future.

Treasuries edged higher ahead of a five-year auction before stabilizing, Commerzbank said. U.S. stocks closed lower, although futures recovered overnight on the back of strong technology earnings.

The U.S. administration has proposed an $88 billion extra spending package, with nearly three-quarters earmarked for the Iran conflict, added the bank.

In Asia, equity markets traded mixed and long-term Japanese government bonds weakened following a 20-year auction.

In Europe, easing inflation expectations from lower oil prices are noted at the European Central Bank. ECB Governing Council member Ante Zigman suggests the recent drop in oil prices should help lower inflation pressures in the eurozone.

Gold extended its decline, slipping below the US$4,000 an ounce level.

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