Reports of constructive indirect talks in Doha triggered a three-day slide in benchmarks, prompting traders to reassess supply expectations.
On Thursday, oil prices fell by about 1% for the third day in a row after reports of progress in indirect talks between the United States and Iran over the Strait of Hormuz in Doha.
According to Reuters, the talks have taken on a more constructive character.
Brent futures fell to $70.80 a barrel, down 1.1% from the previous level. The WTI contract declined to $67.74 a barrel, down 1.2%.
In the previous session, both benchmarks also fell by more than 1% and recorded their lowest levels in the last four months.
Oil market situation and influencing factors
On the eve, a spokesperson for the Qatari Ministry of Foreign Affairs said that indirect talks between the parties had yielded positive progress on a memorandum that had previously halted the war in June.
– Qatar’s MFA press service
Haitong Futures notes that due to the openness of the Strait of Hormuz and sustained deliveries, expectations of an oversupply are rising, weighing on prices, while competition for the market is intensifying pressure on the oil market.
According to sources, OPEC+ member countries are likely to agree at Sunday’s meeting on further increases to production targets from August.
UBS cut its forecast for the average Brent price, citing the memorandum between the United States and Iran and rising volumes transported through the Strait of Hormuz. The forecast for the third quarter was reduced by $25, and for the fourth by $10; in the second half of the year, around $80 per barrel is expected, and in 2027 – $75.
In financial circles it is also noted: it is too early to talk about a full normalization of the situation, but price risk remains due to the imbalance between tanker flows to the Persian Gulf and their outflow from the region.
The next meeting between Iranian and American negotiators is planned after the funeral ceremonies for Iran’s late Supreme Leader Ayatollah Khamenei on July 9, the Qatari MFA said.
According to Reuters, American negotiators Jared Kushner and Steve Wittkoff held constructive talks in Qatar with regional leaders; technical consultations with Iran are ongoing.
Analysts expect that the market situation will remain sensitive while the talks continue and exporting countries continue to consider ways to stabilize the balance of demand and supply.
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