(Investing) – Oil prices fell on Thursday as traders continued to assess mediated U.S.-Iran negotiations, with hopes for improving supply expectations keeping pressure on the market despite lingering geopolitical uncertainty.
At 08:01 ET (12:01 GMT), Brent crude futures, the global oil benchmark, declined 1.7% to $70.38 a barrel and U.S. West Texas Intermediate crude futures dipped 1.9% to $67.25 a barrel.
Markets were digesting the outcome of indirect U.S.-Iran talks in Doha, where negotiators concluded two days of technical discussions without a breakthrough toward a lasting peace agreement, although Qatar said the talks made positive progress and both sides agreed to continue negotiations. The discussions focused on shipping through the Strait of Hormuz and other confidence-building measures, while both sides agreed to continue negotiations, keeping hopes for a diplomatic resolution alive.
Although tensions have eased since a flare-up in fighting in recent days, traders have continued to monitor developments closely, with any disruption to crude flows through the Strait of Hormuz still posing a possible risk to global energy supplies.
Ample supplies keep pressure on crude
On the supply side, fresh U.S. Energy Information Administration data showed domestic crude production climbed to a record 13.93 million barrels per day in April, reinforcing signs of abundant global supplies.
ANZ said cooling geopolitical strains have also reduced supply concerns, although ongoing uncertainty in the Middle East has provided some underlying support for crude prices. The bank also noted its China Commodity Index rose 0.5%, with the energy component also advancing 0.5%, pointing to resilient underlying commodity demand despite the recent pullback in oil prices.
Markets are also assessing expectations that the OPEC+ producer group could increase output again in August.
(Roushni Nair and Scott Kanowsky contributed reporting)
