CRUDE EXTENDS GAINS AS MIDDLE EAST PEACE HOPES FADE

Global oil prices extended their gains on Tuesday as hopes for a near-term agreement between the United States and Iran to reopen the Strait of Hormuz weakened.

Brent crude rose to about $91 per barrel, while West Texas Intermediate gained to around $85 per barrel, following increases of more than two per cent in the previous session.

The continued rise in oil prices came as traders assessed the prospects of renewed negotiations between Washington and Tehran after the deadline for a truce expired.

US President Donald Trump has indicated that he would not extend the existing truce, while Iranian officials have questioned the relevance of the agreement.

Although US officials said discussions with Iran remained active, uncertainty over the talks has increased concerns among investors that crude prices could remain elevated for longer.

The oil market developments also affected global equities, with several Asian stock markets recording losses.

Tokyo's Nikkei 225 fell 2.5 per cent, while markets in Seoul and Taipei also declined. Sydney, Singapore, and Mumbai recorded losses, although Hong Kong, Shanghai, Manila, Wellington, and Jakarta moved higher.

Investors are also watching inflation and interest-rate expectations as higher energy prices could increase pressure on consumer prices.

Long-term US Treasury yields have risen to levels not seen since June 2007, adding to concerns about borrowing costs and broader financial-market conditions.

Market analysts said investors were becoming increasingly concerned about the combined effect of geopolitical tensions, elevated oil prices, and rising bond yields.

The developments are expected to keep global markets sensitive to any changes in the US-Iran situation, particularly developments involving the Strait of Hormuz, a major route for global energy shipments.