Hormuz Talks Weigh on Oil Prices Amid Middle East Tensions
Oil prices continued to decline on Thursday, with Brent crude futures down 0.7% to $87.24 a barrel and West Texas Intermediate crude futures falling 0.7% to $81.67. This marks the fourth consecutive day of losses for Brent and the fifth straight day for WTI.
The decrease in oil prices is attributed to expectations that talks between Iran and Qatar may soon open the Strait of Hormuz, reducing supply disruptions from the Middle East conflict. Iranian officials have stated that the strait will not reopen unless the US meets Tehran's conditions under an interim ceasefire agreement.
ANZ senior commodity strategist Daniel Hynes noted that 'concerns over shortages in the oil market persist.' He also highlighted the impact of the Russia-Ukraine war on diesel markets, with Middle East refineries damaged and Ukraine targeting Russian refineries. This has resulted in a 2.2 million barrel drop in US distillate stockpiles to their lowest level ever recorded for this time of year.