Oil prices extended losses on Thursday as rising expectations of Middle East supply pushed Brent and WTI near levels last seen before the Iran war, Reuters reported.
Prompt-month Brent crude futures for August delivery fell USD 1.22, or 1.65%, to USD 72.52 a barrel as of 0337 GMT.
US West Texas Intermediate lost USD 1.02, or 1.45%, to USD 69.32 a barrel at the same time. Reuters reported that both contracts hit their lowest levels since February 27. August Brent traded below September Brent, which was priced at USD 73.59, signalling ample short-term supply.
IG analyst Tony Sycamore said markets were pricing in a faster return of Middle Eastern barrels than many traders had expected two weeks earlier.
US Energy Secretary Chris Wright said flows through the Strait of Hormuz were close to pre-war levels.
He said at least 20 million barrels had exited the strait in the previous 24 hours. Wright said full normalcy would take a few weeks because the strait needed demining.
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Oman opened temporary routes on Wednesday to ease tanker departures from the Strait of Hormuz, according to Reuters. Macquarie analysts forecast Brent and WTI would average USD 67 and USD 62 per barrel, respectively, in the third quarter.
The Energy Information Administration said US crude stocks fell to their lowest level since 1984 last week, but Reuters reported traders remained focused on Hormuz flows.
