Oil prices extended their losses on Thursday, falling by about one per cent for a third consecutive session as easing geopolitical tensions and expectations of higher supply weighed on the market.
Gatekeepers News reports that Brent crude futures fell 77 cents, or 1.1 per cent, to $70.80 a barrel by 0256 GMT, while U.S. West Texas Intermediate (WTI) crude dropped 84 cents, or 1.2 per cent, to $67.74 a barrel.
Both benchmarks had also declined by more than one per cent in the previous trading session, touching their lowest levels in four months.
Market sentiment improved after Qatar said Iran and the United States had made progress in indirect talks centred on the Strait of Hormuz, a vital shipping route through which around one-fifth of global crude oil passes.
Adding to expectations of increased supply, OPEC+ producers are widely expected to approve another increase in production targets for August when the group meets on Sunday, according to a Reuters report citing sources.
Bloomberg also reported on Wednesday that crude shipments through the Strait of Hormuz had exceeded 10 million barrels per day.
Despite the recent decline in oil prices, Charu Chanana of Saxo Markets cautioned that lower energy costs do not necessarily signal the end of inflationary pressures.
“Investors should be careful not to confuse lower oil prices with the end of the inflation problem,” she said, according to AFP.
“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.
“If the ceasefire breaks, nuclear talks stall, Hormuz reopening faces delays or regional tensions return, oil could rebuild its geopolitical premium,” Chanana added.
