Oil prices fell sharply in early Asian trading on Friday after the United States announced a ceasefire between Israel and Lebanon, raising hopes for stability in the Middle East.
Market sentiment was also influenced by increasingly positive expectations of peace talks between the United States and Iran.
President Donald Trump hinted that a long-term deal was close, prompting continued selling pressure in the oil market.
Overall, oil prices are now heading for a second straight week of losses.
West Texas Intermediate (WTI) crude futures fell about 1.4% to $89.88 a barrel, recording a decline of more than 3% for the week.
Trump had previously announced a 10-day ceasefire between Israel and Lebanon after officials from both countries met in Washington.
He also planned to invite Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun to the White House for further talks.
The agreement, which was finalized early Friday morning, has raised expectations that geopolitical tensions in the region will continue to ease. Lebanon's participation in the ceasefire is seen as an important element that also serves Iran's interests in the conflict.
Although Trump previously expressed confidence that Iran is ready to reduce its uranium stockpile, pressure on Tehran remains as US naval sanctions remain in place and threats of further action remain.
So far, the ceasefire appears stable with no reports of new attacks, with the agreement expected to expire on April 21. There is a possibility that it will be extended if negotiations show positive developments.
At the same time, oil prices continued to be depressed due to expectations of further negotiations between the US and Iran and weaker global demand forecasts from OPEC and the International Energy Agency, which added to the pressure on global energy markets.
