Oil prices settle in mixed direction on conflicting reports of US-Iran ceasefire deal

NEW YORK, May 28 (Reuters) – Oil prices settled mixed on ‌Thursday after a choppy trading session, as traders mulled conflicting reports of progress on a potential deal to extend a ceasefire between the U.S. and Iran.

Brent crude futures for July , which expire on Friday’s settlement, closed down 58 cents, or 0.6%, ​at $93.71 a barrel. The more actively traded August Brent futures were last trading up by ​72 cents at $92.97 as of 3:20 p.m. EDT (1720 GMT).

U.S. oil futures eked out marginal ⁠gains to settle up 22 cents, or 0.3%, at $88.90 a barrel.

Oil prices have been volatile in recent ​sessions on conflicting signals on the possibility of an end to the three-month Iran war and potential re-opening of the Strait ​of Hormuz. Traffic through the maritime chokepoint remains a small fraction of the pre-war level.

An agreement had been reached to extend the ceasefire in the Middle East for 60 days, four sources familiar with the matter told Reuters. News outlet Axios ​first reported about the deal on Thursday.

The agreement still needs U.S. President Donald Trump’s approval, sources told ​Reuters. Iran’s Tasnim news agency, meanwhile, said the text of a potential memorandum of understanding with the U.S. has ‌not yet ⁠been finalized or confirmed.

In early trading, Brent and WTI futures were up more than 2%, after Iran’s Revolutionary Guards said they had targeted a U.S. air base in response to a U.S. attack on the port city of Bandar Abbas.

“The complex continues to advance grudgingly on bullish developments out of Iran while plunging markedly on even the slightest ​suggestion of a reopening ​of the Strait of ⁠Hormuz,” oil trading advisory firm Ritterbusch and Associates said.

“This contrast in responses to bullish and bearish inputs could continue as long as the ceasefire remains intact.”

Oil ​prices were also under pressure from official U.S. data that showed the country’s crude oil stockpiles fell by 3.3 ​million barrels ⁠last week, a sixth consecutive week of declines but lower than the 4.1-million-barrel draw analysts polled by Reuters expected.

U.S. gasoline and distillate fuel stockpiles also fell.

The oil market remains more sensitive to Middle East headlines despite another ⁠week ​of large declines in U.S. stockpiles, UBS analyst Giovanni Staunovo said.