Peace Hopes Push Oil to US$85
Oil prices weakened again on Tuesday (July 28th) after the United States and Iran extended their pause in attacks. Brent fell 1.3% to US$87.22 per barrel, while WTI weakened 1.3% to US$81.55 per barrel.
The decline occurred after President Donald Trump said the two countries were in talks to end the Middle East conflict. Trump said the chances of progress were quite high and chose to hold off on attacks to allow room for negotiations.
However, the market remains cautious due to uncertainty regarding the outcome of the talks. Tanker traffic in the Strait of Hormuz has also not returned to normal, with only four vessels recorded passing through on Monday.
Iran and Oman continue to negotiate to reopen shipping through the Strait of Hormuz. The waterway previously carried about a fifth of global oil flows and was a key flashpoint in the conflict.
Supply pressures also eased after Kazakhstan's main oil export terminal resumed loading. Two tankers began operating at the Caspian Pipeline Consortium facility after being disrupted by a Ukrainian drone attack.
Oil prices have the potential to continue weakening if negotiations result in an agreement and shipping returns to normal. Macquarie estimates the market could experience a surplus of up to 2 million barrels per day in the fourth quarter, but renewed conflict could still push prices higher. (asd)*
Source: Newsmaker.id
