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Summary
- US, Iran talks conclude in Doha, focused on Strait of Hormuz
- Nigeria joins International Energy Agency as an associate member
- Ukrainian military hits Russian oil refinery in Kstovo
July 2 (Reuters) – Oil prices fell more than 1% for the third consecutive day on Thursday as concerns over supply disruptions eased after Qatar said Iran and the U.S. had made progress in talks over the Strait of Hormuz.
Brent futures were $1.06 or 1.48% lower at $70.51 a barrel at 1000 GMT, while U.S. West Texas Intermediate crude fell $1.06, or 1.55%, to $67.52 a barrel, their lowest level since February 27.
The talks made “positive progress” on matters related to the memorandum that halted the war in June, a Qatar Foreign Ministry spokesperson said in a post on X, though there was no sign the two sides made headway towards a lasting peace.
The next meeting between Iran and U.S. negotiators will take place after July 9 funeral processions for Iran’s late Supreme Leader Ayatollah Ali Khamenei, the Qatar ministry added.
“Oil has been flowing out of the Strait of Hormuz, while at the same time we’re also pouring oil out of strategic reserves. And on top of that, crude oil buying from China and oil demand has not really properly revived yet,” said Bjarne Schieldrop, chief commodities analyst at SEB.
“This could be sort of a dynamical picture of price moving down sharply and then rebounding at some point.”
Iran said on Thursday that any U.S. interference in the Strait of Hormuz would trigger a “decisive and rapid” response, adding that the continued presence of U.S. air assets across the waterway endangered regional security, state media reported.
U.S. crude stocks fell to their lowest last week since 2018 as domestic refinery demand rose, while gasoline inventories also declined, the Energy Information Administration said on Wednesday.
UBS cut its Brent forecasts, citing the increase in oil shipping through the strait.
The bank lowered its Brent crude price forecasts, cutting its third-quarter estimate by $25 per barrel to $80, reducing its forecast for the fourth quarter of 2026 by $10 per barrel to $80, and trimming its 2027 outlook by $10 per barrel to $75.
Analysts at HSBC expect the market “to absorb returning Middle East barrels through gradual restocking, alongside the end of IEA strategic stock releases in July”.
“As the near-term ‘mini-glut’ fades, Brent could move back towards $80/b or higher,” the HSBC note said.
Meanwhile, Nigeria has joined the International Energy Agency as an associate member, bringing Africa’s largest oil producer into a network that represents more than 80% of global energy demand, the organisation said on Thursday.
Elsewhere, Ukrainian forces struck the Lukoil-Nizhegorodnefteorgsintez oil refinery in Russia’s Nizhny Novgorod region, Ukraine’s General Staff said on Thursday.
Reporting by Anushree Mukherjee in Bengaluru, Sam Li and Lewis Jackson in Beijing, Sudarshan Varadhan in Singapore; Editing by Edwina Gibbs, Alexander Smith and Emelia Sithole-Matarise
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