Oil prices extended losses on Wednesday, poised for their longest decline streak in over a year amid renewed diplomatic efforts. Brent crude dropped 0.8% to $98.43, tracking a sixth consecutive day of losses not seen since August last year. US crude slipped below $90 a barrel, falling more than 10% over the past five days after Saudi Arabia signaled plans to restart its East-West pipeline and resume Red Sea exports.

The downturn coincides with the first US-Iran talks since June and ahead of a highly anticipated three-day summit between US President Donald Trump and Chinese leader Xi Jinping in Washington. While the meeting aims to uphold an uneasy truce, analysts expect limited breakthroughs. Kenny Ng of Everbright Securities International noted investors should maintain tactical flexibility, awaiting clearer policy signals.

Grace Tam of BNP Paribas Wealth Management suggested the decline slightly reduced expectations for a Fed rate rise in October to 53%. Goldman Sachs analysts noted China is unlikely to substantially increase oil imports in the final quarter, tapping strategic reserves instead. Global bond markets remained stable, with 10-year US Treasury yields at 4.96%.

Austan Goolsbee of the Chicago Fed warned of aggressive policy action if inflation proves enduring.