Crude Prices Plummet on Hopes of Hormuz Deal

Crude oil prices plummeted on Friday in hopes that negotiations between the US and Iran will lead to a deal to reopen the Strait of Hormuz. The November WTI crude oil (CLX26) closed down -2.20 (-2.33%) and November RBOB gasoline (RBX26) closed down -0.1455 (-4.37%).

The losses in crude oil accelerated on Friday after the crude crack spread fell to a 4-week low, discouraging refiners from purchasing crude oil and refining it into gasoline and distillates.

US and Iranian negotiators are exploring a phased deal that would see Iran reopen the Strait of Hormuz if certain conditions are met. Iranian Foreign Minister Abbas Araghchi had submitted a new seven-day proposal to the US, according to The Financial Times.

Data compiled by Bloomberg from the European Union's Copernicus satellite shows oil supertankers with the capacity to ship 12 million barrels of crude were at Saudi Arabia's Persian Gulf export installations on Tuesday. This is a bearish factor for prices as more crude supplies are leaving the Middle East.