Oil prices fell 6% on Wednesday after Donald Trump said that negotiations with Iran were in the final stages. though investors remain wary about the outcome of peace talks as disruption to Middle Eastern supply continues.
Brent crude futures fell $6.64, or 5.97%, to $104.64 a barrel by 1.45pm ET. US West Texas Intermediate futures were down $6.49, or 6.23%, at $97.66.
The US president said that negotiations with Iran were in the final stages. warned of further attacks unless Iran agrees to a deal. The Iranian foreign ministry spokesperson. Esmaeil Baghaei, said Iran was ready to develop protocols for safe shipping traffic in cooperation with other coastal states, without providing further details.
Despite signs of progress, some market participants. analysts remain wary about the outcome of negotiations and global supply tightness that will probably persist even if the US and Iran reach a deal.
“You’ve got to take all these pronouncements with a grain of salt these days, but the market was also quick to reward it. price in the hope of a resolution,” said John Kilduff, partner at Again Capital. Analysts at Citi said on Tuesday that they expect Brent crude to rise to $120 a barrel in the near term, stating that oil markets were underpricing the risk of prolonged supply disruption,. Wood Mackenzie estimated that it could approach $200 if the strait of Hormuz stays largely shut until the end of the year.
Similarly, PVM analysts said global oil stocks could reach critically low levels. “Yet, as observed lately, market players are comparatively nonchalant (or complacent) about what the conflict might bring,” PVM said.
The premium on Brent contracts for delivery next month over contracts for delivery in six months – an indicator of traders’ views of current supply tightness - is about $20 a barrel. way below last month’s highs above $35.
The Russian deputy prime minister. Alexander Novak, said on Wednesday that some countries were lifting sanctions on Russian oil because global markets cannot function without it, the state Tass news agency reported.
Three supertankers were crossing the strait of Hormuz on Wednesday. carrying oil bound for Asian markets, after waiting in the Gulf for more than two months with 6m barrels of Middle East crude onboard. The number of vessels crossing the strait remains well below the 130 or so ships. crossed daily before the war.
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