Oil prices are falling on global markets: key reasons
5 May 10:12
Oil prices are falling on Tuesday, May 5, amid expectations that the U.S. will be able to weaken Iran’s control over the Strait of Hormuz and help restore tanker traffic along that route, according to "Komersant Ukrainian", citing Interfax-Ukraine.
Over the weekend, U.S. President Donald Trump stated that the U.S. Navy would begin assisting ships blocked in the Persian Gulf that are seeking to leave the area.
On Tuesday, the Danish shipping company Maersk reported that one of its U.S.-flagged vessels had passed through the Strait of Hormuz under the protection of the U.S. military. According to Maersk, the Alliance Fairfax was in the Persian Gulf when the conflict began in February and “could not leave the area.”
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The price of July Brent crude futures on the London ICE Futures exchange, as of 8:15 a.m. local time, stands at $113.23 per barrel, which is $1.21 (1.06%) lower than at the close of the previous trading session. On Monday, these contracts rose by $6.27 (5.8%) to $114.44 per barrel.
WTI crude oil futures for June delivery on the New York Mercantile Exchange (NYMEX) have fallen by $2.1 (1.97%) to $104.32 per barrel so far today. At the close of the previous session, their price had risen by $4.48 (4.4%) to $106.42 per barrel.
“The successful passage of the Maersk vessel under military escort has helped to partially ease concerns about disruptions in oil supplies in the short term,” notes KCM Trade analyst Tim Waterer. “This shows that, under current conditions, limited safe passage is possible and reduces the likelihood of the most negative scenarios. However, this remains more of an isolated incident than a full-scale resumption of shipping.”
It was reported earlier that the Iranian military fired two missiles at a U.S. patrol ship that ignored warnings. The incident occurred near the Iranian coast in the Gulf of Oman. Several commercial vessels in the area were also struck.
In addition, authorities in the emirate of Fujairah stated that a drone attack on an oil port caused a major fire at an oil industry facility.
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