Oil Prices Crude falls as US-Iran talks ease supply concerns

Oil prices fell by about one per cent on Thursday, extending losses for a third straight session as signs of progress in indirect US-Iran talks eased concerns over global supply.

US-Iran Talks Pakistan and Qatar report progress in Doha negotiations

Qatar said negotiators made positive progress during discussions focused on the Strait of Hormuz.

The talks addressed issues linked to the Islamabad Memorandum of Understanding, which halted the conflict in June.

However, officials gave no indication that the two sides had moved closer to a permanent peace agreement.

Brent crude futures fell 77 cents, or 1.1%, to $70.80 a barrel.

Meanwhile, US West Texas Intermediate crude dropped 84 cents, or 1.2%, to $67.74 a barrel.

Both benchmarks had already fallen by more than one per cent in the previous session.

As a result, prices reached their lowest levels in four months.

Supply outlook weighs on market

Analysts said the continued flow of oil through the Strait of Hormuz has eased fears of supply disruptions.

Consequently, traders have started to expect an oversupplied market.

Haitong Futures said stronger competition for market share also contributed to lower prices.

Meanwhile, OPEC+ producers are widely expected to approve another production increase when they meet on Sunday.

UBS lowers Brent forecast

Investment bank UBS also lowered its Brent crude forecasts.

The bank cited the US-Iran Islamabad Memorandum of Understanding and increased oil shipments through the Strait of Hormuz.

UBS reduced its average Brent forecast for the September quarter by $25.

It also cut its December-quarter forecast by $10.

The bank now expects Brent crude to average $80 per barrel during the second half of the year.

It forecasts an average price of $75 per barrel in 2027.

Nevertheless, UBS warned that it was too early to expect a full market recovery.

The bank noted that inbound tanker traffic into the Persian Gulf still lags behind outbound shipments.

Talks to resume after funeral

Qatar also confirmed that the next round of US-Iran negotiations will take place after the funeral of Iran’s late Supreme Leader, Ali Khamenei, on July 9.

Officials have not announced a date for the next meeting.