The loose consensus is that de-escalation of the war is impending: File Image/Pixabay

The wild seesaw effect on oil trading caused by the U.S./Iran war took a downward plunge on Wednesday, the second so far in the week, as hope that U.S. president Donald Trump’s peace proposals would be agreed to and hostilities in the Middle East would end.

Even though Iran’s foreign minister said in an interview that his government has not engaged in peace talks “and we do not plan on any negotiations,” Brent ended the session with a drop of 3 percent to $97.26 – in sharp contrast to the $120 levels the benchmark has achieved at times since the war broke out several weeks ago.

West Texas Intermediate settled down 2.2 percent at $90.32 per barrel.

After Trump insisted that the U.S. and Iran have held “very good and productive conversations regarding a complete and total resolution of our hostilities,” JPMorgan stated,  “While there remain questions over who in Iran can curtail military activities as well as what will satisfy Israel interests, the market seems to be expressing a view that it wants to bounce higher from here.

“Also, it is unclear that Iran would drop previous requests, including security guarantees against future aggression and reparation/compensation for losses incurred during this conflict.”

For the record, multiple reports hold that a 15-point plan from Trump had been submitted to Iranian officials by intermediaries from Pakistan, who have offered to host renewed negotiations between Washington and Tehran.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, offered a slightly more optimistic view by remarking, “Oil prices have moved lower on the developments, offering some relief to equities that had been weighed down by worries over inflation and the knock-on impact for interest rates.

“It’s still a highly fluid situation, trying to call how the rest of the week plays out would be unwise, but there are now clearer signs that we are on a path toward de-escalation.”

In related oil news on Wednesday, China’s biggest shipping firm, COSCO Shipping Lines, resumed new bookings for standard general cargo containers to Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Kuwait and Iraq – all six nations of which have endured missile and drone strikes from Iran.

Also on Wednesday, Japan urged the International Energy Agency to prepare to release additional oil stocks from reserves if necessary; Japan, whose oil imports come mainly from the Middle East via the Strait of Hormuz, will be releasing a total of 80 million barrels of oil stocks, including 54 million barrels of crude and 26 million barrels of oil products as part of the IEA’s 400 million barrel release.