Oil Falls for Second Day on Hopes for Hormuz Strait Reopening; WTI Near $75
Summary
- International oil prices extended declines for a second straight day on expectations that talks to reopen the Strait of Hormuz are making progress.
- WTI fell to around $75 a barrel, while Brent also settled below $80.
- The market expects that even if the Strait of Hormuz returns to normal in the short term, resolving the Middle East conflict and Iran's nuclear program will not be easy.
Forecast Trend Report by Period
International oil prices fell for a second straight day as expectations grew that talks to reopen the Strait of Hormuz were advancing.
Bloomberg reported on August 4 that West Texas Intermediate dropped to around $75 a barrel. After plunging more than 10% over the previous two sessions, Brent also settled below $80 a barrel for the first time in about three weeks.
Qatar said a tentative agreement had been reached to normalize commercial shipping through the Strait of Hormuz. The US and Iran also indicated a day earlier that negotiations to reopen the waterway were making progress.
Oil prices have been trending lower since President Donald Trump said he would postpone additional military strikes on Iran and give negotiations more time.
Even so, the market sees no easy path to resolving the broader Middle East conflict or the dispute over Iran's nuclear program, even if traffic through the Strait of Hormuz returns to normal in the near term.
Robert Yawger, head of energy futures at Mizuho Securities, said easing tensions had raised the chances of an agreement. Still, any deal may be enough only for the US to declare a diplomatic success, while major issues including Iran's nuclear program would remain unresolved.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.