Oil Drops, Is Hormuz No Longer a Fear?
Oil prices weakened in Thursday's trading as the market began to see the risk of supply disruptions from the Middle East easing. This sentiment emerged after indirect talks between the United States and Iran in Doha showed positive progress, although they did not produce a permanent peace agreement.
At 00:01 ET (04:01 GMT), the price of US WTI crude oil fell 1.4% to US$67.64 per barrel. Meanwhile, Brent crude fell 1.3% to US$70.67 per barrel. This decline indicates that the market is still pressuring oil prices, as the global supply outlook is considered quite substantial.
Market participants are closely monitoring the outcome of the two-day US-Iran technical talks in Doha. The negotiations have not yet achieved a major breakthrough, but Qatar stated that there has been positive progress, and both sides agreed to continue talks. The main focus of the discussions was the safety of shipping in the Strait of Hormuz and confidence-building measures.
The Strait of Hormuz remains a major concern because this route is crucial for global energy supplies. However, oil shipments through the strait have risen above 10 million barrels per day. This condition strengthens market confidence that oil supplies can still operate even though geopolitical risks have not completely disappeared.
On the supply side, the latest data from the Energy Information Administration shows that US crude oil production rose to a record 13.93 million barrels per day in April. This figure further reinforces the view that global supply remains abundant. Furthermore, the market is also pricing in the possibility of OPEC+ increasing production again in August.
ANZ believes that the easing of geopolitical tensions has eased supply concerns, although uncertainty in the Middle East still provides some support for oil prices. Going forward, investors will be closely monitoring US oil inventory data, developments in US-Iran negotiations, and OPEC+ decisions to determine the future direction of oil prices. (asd)*
Source: Newsmaker.id
