Oil trims gains on report of US-Iran ceasefire deal

• US, Iran reach agreement for ceasefire extension, Axios.
• Agreement still needs Trump's approval, says report.
• Iran's Revolutionary Guards said they targeted a US airbase.

Oil gave up gains on Thursday and traded lower briefly after an Axios report claimed that the US and Iran have reached an agreement for a 60-day ceasefire extension and the start of talks on Tehran's nuclear program.

Brent crude futures LCOc1 were up 33 cents, or 0.4%, at $94.62 a barrel as of 11:01 am EDT (1501 GMT). US West Texas Intermediate futures CLc1 were up 56 cents, or 0.6%, at $89.24. 

Both benchmarks traded down slightly after the report before recovering some ground.

The agreement between the US and Iran still needs final approval from President Donald Trump, who has told mediators he wants a few days to make the final decision, Axios reported, citing US officials and a source involved in the mediation.

Oil prices have been volatile in recent sessions as traders parse through conflicting signals on the possibility of an end to the three-month Iran war and the potential reopening of the Strait of Hormuz. 

Traffic through the maritime chokepoint remains at a fraction of the pre-war level.

Brent and WTI futures were up more than 2% earlier in the session after Iran's Revolutionary Guards said they had targeted a US airbase in response to a US attack on the port city of Bandar Abbas.

It appears that the trading of airstrikes is "part of the negotiating language," said John Evans, an analyst with PVM Oil Associates.

Two supertankers and one liquefied natural gas tanker exited the strait earlier this week with their transponders switched off and are heading for India and China, shipping data from LSEG and Kpler showed.

In the US, crude oil stockpiles fell by 2.8 million barrels last week, the sixth straight week of declines, according to American Petroleum Institute data. 

The US Energy Information Administration is due to release official inventory data on Thursday, a day later than usual due to the Memorial Day holiday on Monday.