Oil prices fell more than 1% on Wednesday, trading near four-month lows as more stranded tankers appeared set to move through the Strait of Hormuz.
Brent crude futures fell 78 cents, or 1.0%, to USD 76.30 a barrel as of 0350 GMT. US West Texas Intermediate dropped 78 cents, or 1.1%, to USD 72.43 a barrel. Both benchmarks settled about 1% lower on Tuesday lowest levels since early March.
“Positive signals from the Persian Gulf are fuelling optimism about oil flows through the Strait of Hormuz,” ING commodity strategists said in a note on Wednesday.
ING said vessel crossings had increased in recent days. However, it said flows remained well below pre-war levels.
Prices also came under pressure after Washington granted Tehran a 60-day sanctions waiver following initial peace talks, allowing Iran to sell oil. Easing hostilities in Lebanon also weighed on crude.
“Crude oil prices were weighed down by hopes of easing US-Iran tensions and a recovery in oil shipments through the Strait of Hormuz,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting.
Akuta said further progress in nuclear negotiations could push prices back to pre-war levels.
Oman and Iran agreed Tuesday to continue discussions on the future administration of navigation in the Strait. US Secretary of State Marco Rubio said any Iranian attempt to levy transit fees would violate international law.
Uncertainty remains over the accord. US President Donald Trump said Iran had agreed to nuclear inspections into “infinity,” while Tehran said it had made no such concession.
An Iranian military source told Fars news agency that a limited number of vessels were being allowed through the Strait each day under coordination with Iran’s Revolutionary Guards Navy.
Ship-tracking data showed three stranded supertankers passed through the Strait on Tuesday. The UN shipping agency said an evacuation plan was underway for hundreds of ships carrying 11,000 seafarers stranded in the Gulf.
Read: Oil Prices Drop 3pc As US-Iran Talks Progress
Market sources reported that the American Petroleum Institute released data Tuesday showing US crude stocks fell by 765,000 barrels in the week ended June 19. Nine Reuters-polled analysts had expected an average draw of about 4.5 million barrels.
