Oil prices turn lower as U.S.-Iran ceasefire extension awaits Trump approval

Oil prices turned lower Thursday, erasing earlier gains, after U.S. and Iranian negotiators apparently reached an agreement to extend the ceasefire.

Negotiators reached a 60-day memorandum of understanding to extend the ceasefire and start negotiations over Iran’s nuclear program, U.S. sources told CNBC. President Donald Trump still has to approve the deal, the sources said. Axios first reported the news.

Brent crude futures, the international benchmark, fell 93 cents to $93.36 per barrel by 1:06 p.m. ET. U.S. West Texas Intermediate futures lost 7 cents to $88.61 per barrel.

Prices rallied earlier Thursday after the U.S. and Iran exchanged military strikes. The Revolutionary Guard said it targeted a U.S. air base at around 4:50 a.m. local time, without disclosing the location.

U.S. Central Command subsequently said Iran launched ballistic missiles toward Kuwait that were successfully intercepted.

The attack came after American forces launched fresh strikes in Iran against a military site believed to threaten U.S. troops and commercial shipping through the Strait of Hormuz, a U.S. official told MS NOW. Several Iranian drones were also reportedly intercepted and downed.

Oil prices have tumbled more than 10% since May 18 when Trump said he called off an imminent wave of military strikes against Iran to allow more time for negotiations.

Secretary of State Marco Rubio said Wednesday that the talks have made some progress. Rubio said Trump prefers diplomacy and will give talks with Iran “every chance to succeed.”

The U.S. and Iran have been locked in a stalemate over the Strait of Hormuz since agreeing to a fragile ceasefire in April.