WASHINGTON, July 2 — Oil prices fell more than one per cent for the third consecutive day on Thursday as concerns over supply disruptions eased after Qatar said Iran and the United States (US) had made progress in talks over the Strait of Hormuz.
Brent futures were US$1.06 or 1.48 per cent lower at US$70.51 a barrel at 1000 GMT, while U.S. West Texas Intermediate crude fell US$1.06, or 1.55 per cent, to US$67.52 a barrel, their lowest level since February 27.
A Qatar Foreign Ministry spokesman said on X (formerly Twitter) that the talks made "positive progress" on matters related to the memorandum that halted the war in June, though there was no sign the two sides made headway towards a lasting peace.
The next meeting between Iran and US negotiators will take place after the July 9 funeral processions for Iran's late Supreme Leader Ayatollah Ali Khamenei.
"Oil has been flowing out of the Strait of Hormuz, while at the same time, we are also pouring oil out of strategic reserves. And on top of that, crude oil buying from China and oil demand have not really properly revived yet.
"This could be sort of a dynamic picture of price moving down sharply and then rebounding at some point," said SEB chief commodities analyst Bjarne Schieldrop.
On Thursday, state media reported that Tehran said any US interference in the Strait of Hormuz would trigger a "decisive and rapid" response, adding that the continued presence of US air assets across the waterway endangered regional security.
On Wednesday, the Energy Information Administration said that US crude stocks fell to their lowest last week since 2018 as domestic refinery demand rose, while gasoline inventories also declined.
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 US$25 per barrel to US$80, reducing its forecast for the fourth quarter of 2026 by US$10 per barrel to US$80, and trimming its 2027 outlook by US$10 per barrel to US$75.
HSBC analysts 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," it said in a note.
Meanwhile, on Thursday, the International Energy Agency announced that Nigeria has joined it as an associate member, bringing Africa's largest oil producer into a network that represents more than 80 per cent of global energy demand.
Elsewhere, Ukraine's General Staff said that its forces struck the Lukoil-Nizhegorodnefteorgsintez oil refinery in Russia's Nizhny Novgorod region.
