SINGAPORE: Oil prices rose on Tuesday and stocks dithered as investor optimism over an imminent US-Iran peace deal was tempered by new US strikes in the Middle East.
US forces conducted strikes in southern Iran in what was described as defensive action, as Tehran's top negotiator and its foreign minister were in Doha for talks with Qatar's prime minister on a potential deal with Washington to end the three-month-old war.
Also, US Secretary of State Marco Rubio said negotiating a deal with Iran could "take a few days", quashing hopes of an imminent end to the conflict.
The developments sent Brent futures rising more than 2% in Asian trade to $98.21 a barrel.
US West Texas Intermediate crude was up slightly from Monday's last traded price but down 4.9% from Friday's close. There was no settlement on Monday due to the US Memorial Day holiday.
"I'm a bit sceptical... We keep being told there's a deal that's near, but what does the deal look like? That's what's really important. When's the Strait of Hormuz going to open... There's a lot we don't know", said Joseph Capurso, a strategist at Commonwealth Bank of Australia.
Stock markets were mixed, with MSCI's broadest index of Asia-Pacific shares outside Japan advancing 0.67%, while Japan's Nikkei shed 0.14%.
Nasdaq futures trimmed earlier gains to trade 0.86% higher, while S&P 500 futures rose 0.66%.
EUROSTOXX 50 futures eased 0.16%, while FTSE futures added 0.2% and DAX futures lost 0.26%.
"The market wants to believe that it's all going to end soon, because the war not ending is quite bad for the world economy. The world economy's had these buffers of running down inventories, but you can't keep running down inventories", said Capurso.
In Hong Kong, stocks rose as the chip-making sector's gains helped overcome jitters around Beijing's crackdown on illegal cross-border trading.
The Hang Seng Index was up 0.5%, while on the mainland, China's CSI300 blue-chip index dipped 0.3%. — Reuters
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