6 days ago
Oil Prices Extend Losses as Hormuz Talks Raise Supply Hopes
Oil prices went down again because investors hope fighting in the Middle East may ease.
Brent oil fell to $87.24 per barrel, while another type called WTI fell to $81.67.
Countries are discussing ways to reopen the Strait of Hormuz.
This waterway is important because it carries oil and gas to global markets.
Oil shipments through it have dropped sharply since Iran restricted traffic.
Qatar’s prime minister is expected to visit Iran to help restart diplomatic talks.
However, Iran and the United States still disagree about how the conflict should end.
The fighting has also damaged refineries and reduced diesel supplies.
Because of these developments, traders are watching negotiations and fuel inventories closely.
Brent crude fell 0.7% to $87.24 per barrel, recording a fourth straight daily decline.
West Texas Intermediate dropped 0.7% to $81.67 per barrel, extending its losing streak to five sessions.
Talks involving Iran, Qatar and Oman raised hopes that the Strait of Hormuz could reopen.
Oil flows through the strait have fallen to about one-quarter of pre-war levels, according to ship-tracking data.
Middle East and Russia-Ukraine conflict damage has also reduced diesel supplies and lowered US distillate inventories.
- Who
- Iran, Qatar, Oman, the United States and Israel are involved in the reported conflict or negotiations; oil traders and producers are affected.
- What
- Crude oil prices extended their declines amid hopes that negotiations could ease disruptions through the Strait of Hormuz.
- Where
- The Strait of Hormuz and the wider Middle East Gulf region, with related effects on the United States, Russia and Ukraine.
- When
- Thursday; the conflict began on February 28 and has continued for nearly six months, according to the article.
- Why
- Investors expect diplomatic talks could reopen the strait and restore energy flows, although Iran says it will remain closed unless Washington accepts its conditions.
Supply-Relief Hopes
Conditions and Continued Disruption
Reopening the Strait of Hormuz
Supply-Relief Hopes
Talks involving Iran, Qatar and Oman could lead to an agreement to manage the waterway and ease energy supply disruptions.
Conditions and Continued Disruption
Iranian officials said the strait will remain closed unless the United States accepts Tehran’s conditions under an interim ceasefire agreement.
Prospects for Ending the Conflict
Supply-Relief Hopes
Qatar’s prime minister is expected to travel to Iran to revive diplomatic negotiations, while the United States has paused attacks for about a month.
Conditions and Continued Disruption
Iran and the United States remain far apart on the conditions needed to end the conflict, and Iran continues targeting Gulf and Strait shipping.
Fuel Supply Outlook
Supply-Relief Hopes
A reduction in conflict-related disruptions could help restore oil and gas shipments to global markets.
Conditions and Continued Disruption
Damage to Middle Eastern refineries and Ukrainian attacks on Russian refineries have reduced diesel production and exports.
Key facts
- Brent price
- $87.24 per barrel after falling 60 cents, or 0.7%.
- WTI price
- $81.67 per barrel after falling 56 cents, or 0.7%.
- Brent losing streak
- Four consecutive sessions.
- WTI losing streak
- Five consecutive sessions.
- Strait oil flows
- About one-quarter of pre-war levels, according to ship-tracking data.
- Pre-war traffic
- The Strait of Hormuz handled shipments equivalent to roughly one-fifth of global fuel consumption before February 28.
- US distillate inventories
- Inventories fell by 2.2 million barrels to 103.4 million barrels in the week ended August 21.
Sources
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