Oil prices slide 2% on Iran-Oman talks to reopen Strait of Hormuz

Oil prices dropped about 2% on Wednesday, adding to the previous session's losses, on fresh hopes the Strait of Hormuz could reopen after Iran said it had resumed talks with neighbour Oman on managing the strategic waterway.

Brent crude futures LCOc1 fell $1.78, or 2.0%, to $86.80 a barrel by 0027 GMT, while U.S. West Texas Intermediate crude futures CLc1 were down $1.49, or 1.8%, at $80.87. Both benchmarks lost more than 3% on Tuesday.

"The market continues to react to developments surrounding navigation through the Strait of Hormuz, and hopes for progress in talks between Iran and Oman have triggered selling," said Mitsuru Muraishi, an analyst at Fujitomi Securities.

"That said, uncertainty over the outlook has prompted bargain buying, limiting further losses, and prices are likely to remain range-bound for the time being," he added.