Oil Prices Are Falling on Global Markets: The Main Reasons
2 July 14:36
Oil prices are falling on Thursday, July 2, amid reports of progress in negotiations between the U.S. and Iran. This is reported by "Komersant Ukrainian", citing “Interfax-Ukraine.”
As of 8:11 a.m., September Brent futures on the London-based ICE Futures exchange were trading at $70.87 per barrel, which is $0.7 (0.98%) below the previous session’s closing price. On Wednesday, they fell by $1.38 (1.89%) to $71.57 per barrel.
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WTI crude oil futures for August delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have so far fallen by $0.71 (1.04%) to $67.87 per barrel. At the close of the previous session, their price had fallen by $0.92 (1.32%) to $68.58 per barrel.
Qatar’s Foreign Ministry spokesman Majid al-Ansari reported progress during indirect talks between the U.S. and Iran in Doha on Wednesday. According to him, the parties agreed to continue discussions in the near future, and the next meeting will be scheduled “as soon as possible” after the funeral of Iran’s former Supreme Leader Ayatollah Ali Khamenei.
“The talks taking place in Qatar are seen as a positive factor, and this has allowed prices to fall even further,” Saxo Bank analyst Ole Hansen wrote the day before.
Oil shipments through the Strait of Hormuz continue to rise and have already exceeded 10 million barrels per day, according to Trading Economics, citing a statement from an unnamed U.S. official. The website also notes that oil exports from the UAE have returned to pre-crisis levels and that exports from Iran have increased significantly.
“Optimism is growing as more and more oil passes through the Strait of Hormuz,” said Phil Flynn, an expert at Price Futures Group. Once the crisis is over, the world may be producing more oil than ever before, he suggested.
According to data released yesterday by the U.S. Department of Energy, commercial oil inventories in the country fell by 3.78 million barrels last week. Inventories at the Cushing terminal, where oil traded on the New York Mercantile Exchange (NYMEX) is stored, increased by 709,000 barrels. Commercial gasoline inventories fell by 2.33 million barrels, while distillate inventories rose by 2.48 million barrels.
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