Oil prices dropped, with investors eyeing the outcome of potential US-Iran talks in Doha amid weekend missile fire from both sides that tested an interim ceasefire to end the four-month-old war, Reuters reports.

Brent August crude futures were down 1.03 per cent, or 75 cents, at $72.40 a barrel. The more actively traded September contract was down 0.54pc, or 40 cents, at $73.51 a barrel.

US West Texas Intermediate fell 0.66pc, or 47 cents, to $70.32 a barrel.

“Investors are pricing in hopes of a positive outcome from the Doha talks, even though real normalisation of flows through the Strait of Hormuz is not yet visible,” said Tim Waterer, chief market analyst at KCM Trade.

“The market is cautiously hopeful but still hedging its bets until we see more tangible signs of de-escalation,” Waterer added.