Oil prices continue to fall: key factors driving the decline
6 May 11:17
Oil prices continued to fall on the morning of Wednesday, May 6, following a decline at the close of trading on Tuesday, May 5. This was reported by "Komersant Ukrainian", citing Interfax-Ukraine.
“July Brent futures on the London ICE Futures exchange, as of 8:09 a.m., are trading at $108.1 per barrel—$1.77 (1.61%) lower than at the close of the previous trading session. The day before, these contracts fell by $4.57 (4%) to $109.87 per barrel,” the report states.
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WTI crude oil futures for June delivery on the New York Mercantile Exchange (NYMEX) have fallen by $1.86 (1.82%) to $100.41 per barrel. At the close of the previous session, their price fell by $4.15 (3.9%) to $102.27 per barrel.
The market remains focused on the situation in the Middle East.
U.S. President Donald Trump announced on Tuesday that “significant progress has been made toward a comprehensive and final agreement” with Iran. He also announced that the U.S. is suspending Operation Freedom, which involves escorting ships through the Strait of Hormuz, for a “short period” to assess the possibility of finalizing and concluding a peace agreement with Tehran.
This statement was seen as a signal of a possible de-escalation and raised hopes for a gradual resumption of supplies from the Persian Gulf, wrote LSEG analyst An Pham. At the same time, the expert added that oil prices remain elevated, as the prospects for a peace agreement remain uncertain, and it will take time for trade flows to fully recover, even if an agreement is reached.
Meanwhile, the blockade of the Strait of Hormuz continues. The halt in shipping through this key oil supply channel has led to a significant reduction in global oil inventories.
The American Petroleum Institute (API) reported yesterday that U.S. oil reserves fell by 8.1 million barrels last week. Analysts surveyed by Trading Economics had expected a decline of 2.8 million barrels.
The API receives data from refinery, storage, and pipeline operators on a voluntary basis. U.S. Department of Energy data on oil inventories, which is more important for the market, will be released on Wednesday at 5:30 p.m. ET.
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