Oil extends losses amid Strait of Hormuz reopening hopes

Oil prices fell further on Thursday as hopes grew that negotiations involving Iran might reopen the Strait of Hormuz and ease supply disruptions from the Middle East conflict, Mettis Global reported. Brent crude futures nonetheless rose 0.66 per cent to $87.51 per barrel, while West Texas Intermediate (WTI) slipped $1.09, or 1.35 per cent, to $81.89 a barrel at 09:40 am PST.

A senior Iranian source said Iran and Oman were reportedly close to a deal to oversee the waterway, a route major Gulf oil producers use for exports. Qatar's prime minister plans to head to Iran on Thursday in an effort to restart talks on ending the conflict, now nearing its sixth month. The US has paused strikes on Iran for about a month while tightening economic pressure, though major gaps remain and Iran keeps attacking vessels in Gulf waters.

Before hostilities began on February 28, oil and natural gas shipments through the strait equalled nearly a fifth of global consumption. Since Iran tightened access to the waterway, ship-tracking data shows flows have slid to roughly a quarter of pre-war levels. The US Energy Information Administration said distillate stocks, such as diesel and heating oil, dropped 2.2 million barrels in the week to August 21, reaching 103.4 million barrels. Hynes said this was the lowest level on record for this point in the year.