Juliet Oladele, Reporting
OIL prices dropped by around one per cent on Thursday, marking their third consecutive decline, after Qatar signalled that Iran and the United States had made progress in indirect talks focused on the strategic Strait of Hormuz.
Brent futures lost 77 cents, or 1.1 per cent, to $70.80 a barrel by 0256 GMT, while US West Texas Intermediate crude fell 84 cents, or 1.2 per cent, to $67.74 a barrel. Both benchmarks also tumbled more than one per cent in the previous session, hitting their lowest levels in four months.
The declines come as traders price in the possibility of increased flows through the Strait of Hormuz, through which roughly a fifth of the world’s crude usually passes. Bloomberg reported on Wednesday that supplies via the waterway had hit more than 10 million barrels a day.
OPEC+ Output Decision Looms
Adding to downward pressure, OPEC+ oil-producing countries are likely to agree to a further hike in their output targets from August when they meet on Sunday, according to Reuters, which cited sources.
Any increase in production would come at a time when global demand concerns and a stronger dollar have already weighed on sentiment.
Analyst Caution
Despite the recent drop, Charu Chanana at Saxo Markets warned that investors should not confuse lower oil prices with the end of inflation problems.
“The broader price picture remains sticky. Wage growth, services inflation, tariffs, supply-chain shifts, and fiscal spending can all keep inflation above the Fed’s comfort zone, even if energy prices fall,” she told AFP.
“If the ceasefire breaks, nuclear talks stall, Hormuz reopening faces delays or regional tensions return, oil could rebuild its geopolitical premium,” Chanana added.
The market now awaits Sunday’s OPEC+ meeting for further direction, with any surprise decision on output likely to trigger fresh volatility.
