Oil prices stabilized after the largest quarterly drop since the COVID-19 pandemic, as markets monitor the progress of peace talks between the US and Iran and the resumption of shipping through the Strait of Hormuz. Bloomberg reports, writes UNN.
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West Texas Intermediate (WTI) crude is trading near $70 per barrel after losing nearly a third of its value over the past three months. Meanwhile, Brent closed below the $73 per barrel mark.
According to Bloomberg, Jared Kushner and US President's Special Representative Steve Witkoff arrived in Doha to participate in indirect negotiations on a long-term agreement between the US and Iran. Against this backdrop, the movement of oil tankers through the Strait of Hormuz has begun to gradually recover after the recent escalation.
Analysts forecast a supply surplus in the market
We expect this to be done by the end of July. Once we normalize flows through the strait, we are expected to enter a situation of supply surplus
Bloomberg notes that Morgan Stanley has also revised its oil price forecast downward. The bank attributes this to a faster-than-expected recovery of shipments through the Strait of Hormuz, high supply from the US, and weak demand in China.
Additional pressure on the market comes from rising exports from Iran and record shipments of Russian oil, contributing to the accumulation of significant crude stocks at sea.