Oil Market Pricing in End to Iran Conflict, But Economist Warns of Trouble

The oil market looks to be pricing in an end to the Iran war, but Commonwealth Bank's sustainable and energy economist thinks there is trouble ahead.

Brent crude dropped 1.6% late on Monday, reversing an initial 2% jump in early Asian trade, as the US and Iran ended high-level peace talks, paving the way for lower-level negotiations this week.

Both parties have agreed to create a "de-confliction cell" to address the ongoing fighting in Lebanon -- which is clearly a sticking point for negotiations.

John Oh thinks the market is underpricing oil. He thinks there is a lot of optimism in the market driving the price lower including the peace deal and large traffic flows through the Strait of Hormuz.

He says CBA is predicting Brent crude to fall to $US80 a barrel by the end of the year.

Hello, I'm Daniel Ziffer from the ABC business team, and I'll be taking you through the morning on our business, finance and economics blog.

Overnight, Wall Street indices were mixed, mainly lower.

The blue-chip Dow Jones of 30 mega-companies, including Boeing and Visa, was +0.3% to 51,712 points.

The broader S & P 500, which covers 500 of the largest listed companies in the US, -0.4% to 7,472 points.

The tech-heavy Nasdaq was +1.3% to 26,166 points.

These numbers are live, and trading is continuing; we'll update you when there's a firm closing price.

Our market is set to lift, with the ASX 200 futures index tipping a rise of +0.2% or 21 points to 8,831 points.

There's lots to get to, all of it news, analysis and information and none of it financial advice.

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