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Oil Trading Sharply Lower as Middle East Fighting Calms, Reviving Peace Hopes

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Oil traded sharply lower early on Monday as the US and Iran paused fighting over the weekend, reviving hopes the pair will reach a peace deal.

West Texas Intermediate crude oil for September delivery was last seen down $5.24. or 5.9%, to $84.07 per barrel, while September Brent oil, was down $6.25, or 6.5%, to $90.53.

The drop comes as the US and Iran paused fighting over the weekend, with US officials on the weekend saying talks are continuing, raising hopes the two countries will be able to reach a deal to end the war that is about to enter its sixth month.

"Brent crude fell as much as 7.4% at Monday's open, briefly dipping below 90 dollars a barrel, and was trading near 88 into the European morning; WTI fell about 5% to around 85. The move reverses part of last week's surge that briefly took Brent above 100 dollars, a level last seen in late May," Saxo Bank noted.

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