Oil ticks up after selloff as talks to end US-Iran war remain uncertain

Prices dropped after U.S. President Donald Trump said on Sunday he was holding off on new attacks on Iran pending ongoing talks to end their war and settle claims over control of the key Strait of Hormuz.

The strategic waterway, which connects Gulf oil producers to global markets, was a channel for about a fifth of global shipments of crude oil and natural gas before the conflict.

However, on Monday, Iran's Foreign Ministry spokesman Esmail Baghaei rejected Trump's claim, saying no negotiations with the U.S. were taking place and no meetings were scheduled.

"The scale of the sell-off seems fairly overdone, given that there's still considerable uncertainty. We’ve been in this situation multiple times before, only to see things unravel," ING analysts said in a note.

"And with Iran denying that any talks are underway and Trump issuing warnings if no deal materialises, the backdrop clearly leaves ample room for a renewed escalation."