Oil extends losses on hopes for Middle East talks to ease supply woes

Oil prices slid on Thursday for a fourth straight session, as investors bet that talks between Iran and Qatar could reopen the Strait of Hormuz and ease supply shortages. Brent crude slipped 41 cents to $87.43 a barrel, a drop of 0.5%, while West Texas Intermediate fell 37 cents to $81.86, extending its run of losses to five sessions. The Express Tribune reported that the strait handled roughly a fifth of global oil and gas consumption before hostilities involving Iran began on February 28.

Oman and Iran are pressing ahead with terms for controlling the waterway, which Iran's Revolutionary Guards tied to an understanding on dividing the passage and its revenues. Qatar's prime minister is due in Iran on Thursday to restart talks aimed at ending a conflict now nearly six months old. Washington has paused its attacks for about a month while adding economic pressure, a move that has lifted hopes of easing Gulf supply disruptions. Even so, the two sides remain far apart.

ANZ's Daniel Hynes said shortage worries persist, while Phillip Nova's Priyanka Sachdeva warned that the nuclear dispute will be hard to settle quickly. Diesel is also tight, with US Energy Information Administration data showing distillate stocks down 2.2 million barrels to 103.4 million in the week ended August 21. Hynes said that is the lowest on record at this point in the year.