*US announces ceasefire extension with Iran
*Shipping traffic through Hormuz still largely halted
*API shows drops in US crude, fuel and distillate stocks -sources
Oil prices were largely flat on Wednesday after rising about $1 at the start of Asian trading, with investors assessing the outlook for U.S.-Iran peace talks following the U.S. extension of a ceasefire.
Brent crude futures were up 3 cents, or 0.02%, at $98.51 a barrel at 0438 GMT, after touching $99.38 per barrel earlier in the session. West Texas Intermediate futures were down 13 cents, or 0.14%, to $89.53 after climbing as high as $90.71 at the open.
Both benchmark contracts rose about 3% on Tuesday.
U.S. President Donald Trump said he would indefinitely extend the ceasefire with Iran, hours before its expiry, to allow talks to continue to end a war that has killed thousands and shaken the global economy.
The move appeared unilateral, and it was not immediately clear whether Iran, or U.S. ally Israel, would agree to extend the truce, which began two weeks ago.
“With the outcome of talks still unclear and the Strait of Hormuz closed, the market lacks clear direction,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.
“Unless fighting resumes, prices are likely to stay near the current levels for now,” Kikukawa said.
Trump also said the U.S. Navy would maintain its blockade of Iran’s ports and shore, which Iranian leaders have called an act of war.
There was no immediate comment from Iran’s most senior leaders on Trump’s ceasefire extension. Tasnim News Agency, affiliated with Iran’s Revolutionary Guards, said Iran had not asked for the extension and repeated its position of breaking the U.S. blockade by force.
Shipping traffic through the Strait of Hormuz, which normally channels about 20% of global oil and liquefied natural gas supplies, remained broadly halted on Tuesday with only three ships passing along the waterway in the past 24 hours, shipping data showed.
Elsewhere, the Israeli military said Hezbollah fired rockets at its troops in southern Lebanon, accusing the Iran-backed group of violating a ceasefire ahead of U.S.-mediated talks with Lebanon this week. There was no immediate comment from Hezbollah.
=== Reuters ===
