Oil Stuck, Hormuz Supply Flows Strongly
Oil prices stabilized after tanker traffic through the Strait of Hormuz resumed. This added short-term supply to the market, while talks between the United States and Iran continued.
West Texas Intermediate, or WTI, traded around US$68 per barrel after fluctuating in the previous session. Meanwhile, Brent closed below US$72 per barrel. On Thursday, the oil market structure briefly shifted into a slight contango, a condition where the price of the near contract is lower than the next. This usually signals abundant supply.
Pressure on oil prices also came from rising Saudi Arabian oil exports. Saudi exports are said to have surged to around 90% of pre-war levels, as more of the kingdom's tankers successfully pass through the Strait of Hormuz. This recovery has boosted market confidence that supply disruptions from the Gulf region are easing.
US President Donald Trump said the United States is still negotiating with Iran. He said Iran is close to agreeing to many of Washington's demands. However, talks have not been entirely smooth, as differences remain over the management of the Strait of Hormuz, the payment of transit fees, Iran's nuclear program, and efforts to end the conflict in Lebanon.
Citigroup assesses that fundamental factors in the oil market are starting to become dominant again as disruptions in Hormuz have eased and shipping flows are returning to normal. However, the US-Iran peace process remains fragile. On Friday morning (July 3rd) in Singapore, August WTI fell 0.3% to US$68.48 per barrel, while September Brent closed slightly higher by 0.3% to US$71.54 per barrel. (asd)*
Source: Newsmaker.id
