CRUDE WRAP: WTI (X6) SETTLES USD 1.85 LOWER AT 90.52/BBL; BRENT (Z6) SETTLES USD 0.83 LOWER AT 95.41/BBL

CRUDE WRAP: Crude prices fell amid hopes for US/Iran diplomacy and signs of supply returning. Reports suggested a senior Iranian official said Tehran welcomes a revival of diplomacy if the US takes steps, while separate reports suggested Iran could reopen the Strait within seven days if the US eases military pressure and lifts the blockade. Also adding to the downside were reports that Saudi Arabia has restarted the East-West oil pipeline and is preparing to resume crude exports from Yanbu later today. WTI and Brent hit lows of USD 89.16 and 93.71/bbl respectively, before gradually paring losses after Iranian press pushed back on the earlier source reports regarding the reopening of the Strait of Hormuz in exchange for easing US military pressure and lifting the blockade. Al Jazeera later reported that Iran would only consider engaging in talks with the US if Washington fulfils commitments pertaining to its conditions and provides guarantees. A source said Iran's conditions for resuming talks include “an end to the war on all fronts”, negotiations on a timeline for a full Israeli withdrawal from southern Lebanon, the release of frozen funds, lifting of the naval blockade and newly imposed sanctions, an end to military threats, and an oil waiver. Nonetheless, there were multiple reports of ongoing diplomatic efforts by mediators. ILNA reported that Qatar and Pakistan have entered mediation between the US and Iran, while Iran reportedly asked China to take a greater role in bringing the US and Iran to the negotiating table. US President Trump is also expected to hold a meeting today with representatives from nine Arab nations to discuss Iran. Trump later said he thinks a settlement will be reached with Iran, noting that some communications between the two countries occurred today and that the relationship is developing. Trump also reportedly told advisers he would like to meet Iranian officials if conditions are right. Crude prices moved lower once again in the afternoon after US President Trump announced that US officials met with an Iranian delegation for three hours in a meeting that was described as productive and went well, while another meeting is scheduled in the near future. Meanwhile, diesel futures ticked lower after Trump spoke on a ban on diesel exports, saying he has called for it; currently examining it. ENERGY UPDATES Libya's National Oil Corporation said the shutdown of the Sharara-Zawiya crude pipeline has cut production by around 130k BPD and warned losses will rise if the shutdown persists. Saudi Aramco has reportedly told Asian refiners they will soon be able to pick up oil from Yanbu, according to Bloomberg sources. Javier Blas highlighted new satellite imagery showing Saudi Arabia's Ju'aymah oil terminal quite busy again, with six supertankers loading crude and another at Ras Tanura. The US is discussing a USD 10bln joint investment fund with Arab states to repair energy and other infrastructure damaged during the Iran war, according to the FT.