Oil gains on lack of progress on US-Iran talks, Hormuz shipping still disrupted

Oil prices extended their gains on Thursday, rising more than $1 ‌in the wake of stalled peace talks between Iran and the United States and as both nations maintained restrictions on the flow of trade through the Strait of Hormuz, Reuters reported.

Brent crude futures rose $1.26, or 1.2%, to $103.17 a barrel at 0630 GMT, after settling above $100 for the first time in ​more than two weeks on Wednesday. West Texas Intermediate futures were also up $1.20, or 1.3%, at $94.16.

Both benchmarks closed ​more than $3 higher on Wednesday after larger-than-expected gasoline and distillate stock draws in the U.S., and ⁠over the lack of progress on Iran peace talks.

"The oil market is repricing expectations with little sign of progress in ​finding a resolution in the Persian Gulf," said ING analysts in a note, adding that hopes for a resolution are ​fading as peace talks stall.

"In addition, Iran's seizure of two vessels attempting to transit the Strait of Hormuz suggests disruptions to shipments are set to continue."

While U.S. President Donald Trump extended a ceasefire between the countries following a request by Pakistani mediators, Iran and the U.S. are still restricting ​the transit of ships through the strait, which carried about 20% of daily global oil supplies until the war began on ​February 28.

Iran seized two ships in the waterway on Wednesday, tightening its grip on the strategic chokepoint. Trump has also maintained a U.S. Navy ‌blockade ⁠of Iran's trade by sea, and Iranian parliament speaker and top negotiator Mohammad Baqer Qalibaf said a full ceasefire only made sense if the blockade was lifted.

The U.S. military has intercepted at least three Iranian-flagged tankers in Asian waters and is redirecting them away from positions near India, Malaysia and Sri Lanka, shipping and security sources said on Wednesday.

With his extension of the ​ceasefire on Tuesday, Trump again ​pulled back at the ⁠last moment from warnings to bomb Iran's power plants and bridges. Trump has not set an end date for the extended ceasefire, White House press secretary Karoline Leavitt told reporters.