Oil prices moved lower on Thursday as investors weighed improving prospects for crude supplies from the Middle East against the persistent geopolitical risks that continue to shape the energy market.
At 08:20 GMT, Brent crude futures, the international benchmark, were down 0.7% at $71.10 a barrel, while U.S. West Texas Intermediate (WTI) crude futures also fell 0.7% to $68.12 a barrel.
Markets monitor developments in U.S.-Iran negotiations
Traders continued to assess the latest round of indirect negotiations between the United States and Iran, held in Doha.
After two days of technical discussions, negotiators ended the talks without reaching a comprehensive agreement. However, Qatar described the negotiations as constructive, saying positive progress had been achieved and confirming that both parties had agreed to continue discussions.
The talks centred on maritime security in the Strait of Hormuz and other confidence-building measures, keeping alive hopes for a diplomatic solution despite the absence of a final breakthrough.
Strait of Hormuz remains a key focus
Although tensions in the region have eased since the recent conflict, the Strait of Hormuz continues to be closely watched because of its importance to global crude exports.
Any disruption to shipping through the waterway would remain a significant risk for international oil supplies.
At the same time, crude shipments through the Strait of Hormuz climbed above 10 million barrels per day, reinforcing confidence that exports are continuing despite the uncertain geopolitical backdrop.
Record U.S. production adds to supply pressure
Fresh data from the U.S. Energy Information Administration showed domestic crude production reached a record 13.93 million barrels per day in April, strengthening expectations that global oil supplies will remain well supplied.
ANZ said easing geopolitical tensions have reduced concerns over supply disruptions, although ongoing uncertainty in the Middle East continues to provide some underlying support for prices.
The bank also noted that its China Commodity Index rose 0.5%, with the energy component also increasing 0.5%, suggesting underlying commodity demand remains resilient despite the recent decline in oil prices.
OPEC+ decision and inventories remain in focus
Investors are also watching for further market catalysts, including expectations that OPEC+ could approve another production increase in August.
Upcoming U.S. crude inventory data and further developments in negotiations between Washington and Tehran are also expected to play an important role in determining the near-term direction of oil prices.